Business Plan For Daycare Learning Center
Executive Summary
My First Child Daycare aspires to be an established business that desires to create a center daycare in the area of Allentown, PA., a place where a parents will feel satisfied and confident to leave their children, with the assurance that their precious little ones are well taken care of. The owner's intention is to offer a teachable moment in the daily routine by creating programs that can be enjoyable as well as an opportunity for learning for the children. The children eligible for admission to the daycare learning center shall be between 3 months to 10 years of age.
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Various factors are critical for the success of a daycare facility in the USA that have been discussed in detail in the current business plan. The day care center business requires the maintenance of a safe and secure home like environment for kids. The businesses must have a passion for serving the community through care and education and also must get insured for theft or fire, and should be competitive enough to convince parent’s hat it is worth spending their income on child day care expenses . The childcare industry in the USA is expected to grow at a steady rate in the future with the improving economy and the increasing demand for quality daycare facilities . The daycare business revenues are expected to reach around $53.8 billion by the year 2017 .
The current business plan provides the details about the daycare business in USA, industry statistics, the target market for the daycare facility and the strategies that shall be used in the establishment of the daycare business in the area of Allentown in PA in USA.
The business plan also provides the financial projections on the basis of the estimated sales data and the gross profit margins of the business for the years 2013-2015.
Executive Summary 2
1.1 Company Summary 2
1.2 Purpose of the business 2
2.0 Services 3
3.0 Market Analysis Summary 3
3.1 Description of Market 3
4.0 Strategy and Implementation Summary 5
4.1 Competitive Edge 5
4.2 Marketing and Advertising Strategy 6
4.3 Sales Strategy 6
4.4 Pricing Strategy 7
5. Contracts or Purchase Orders 7
My First Child Daycare aspires to be an established business that desires to create a center daycare in the area of Allentown, PA., a place where a parents will feel satisfied and confident to leave their children, with the assurance that their precious little ones are well taken care of. The owner's intention is to offer a teachable moment in the daily routine by creating programs that can be enjoyable as well as an opportunity for learning for the children. The children eligible for admission to the daycare learning center shall be between 3 months to ten years of age.
1.2 Purpose of the business
Product or service
The product or service of the business is a daycare center that provides a learning opportunity along with home like care for kids between 3 months to 10 years of age.
Unique about the business
A unique aspect of the day care center shall be a learning opportunity through innovative games and methods for the kids in a safe and hygienic caring environment.
Company's strengths and weaknesses
The strengths of the company include the facilities for children such as safe and secure environment and innovative learning programs that contribute in the growth and development of children. The daycare centers provide the kids with a stable and structural environment .
The weaknesses of the business include the limited focus on the kids between 3 months to 10 years of age that require special care and attention, the increasing cost of daycare management facilities in USA and increased concerns over the security of the kids in day care centers. Also, the heavy costs that parents have to incur for additional services such as late pickups are some of the disadvantages of the business .
Nature of this industry
The day care center business requires the maintenance of a safe and secure home like environment for kids. The businesses must have a passion for serving the community through care and education and also must get insured for theft or fire, and should be competitive enough to convince parent’s that it is worth spending their income on child day care expenses . The childcare industry in the USA is expected to grow at a steady rate in the future with the improving economy and the increasing demand for quality daycare facilities . The daycare business revenues are expected to reach around $53.8 billion by the year 2017 . The daycare businesses in the USA are one of the fastest growing industries in the USA .
2.0 Services
My first child daycare offers child care services for children from 3 months and 10 years of age. The hours of operation are 24/7 from Monday through Friday. The services include the food, learning and lodging facilities for the children in a positive, healthy and a secure environment.
3.0 Market Analysis Summary
The US daycare industry includes 53000 commercial facilities with an annual revenue of $20 billion and 21000 non-profit facilities with an annual revenue of $13 billion . The industry is highly fragmented with the top 50 players controlling less than 20 percent of the revenue .
The child care market is quite competitive in the Allentown area. There are over 400 different facilities. There are two types of facilities. The Large style is commercially run and is typically a corporate center. The nets are family day care with licensing or without license. The center facilities can host between 20-100 children as they have more space and the ability to get more funding from the Keystone Start Program and other institutions of the government. The child care development centers vary on the basis of their size, licensing and location .
3.1 Description of Market
Market Segmentation
Market segmentation can be defined as the process of dividing the market into meaningful, relatively similar and identifiable market segments or groups . The market segmentation can be considered effective when the target market is measurable, substantial enough to support the financials of the business and make it profitable, accessible which means that the members or target customers are reachable and responsive in the sense that the actions of the marketing activities should produce some response from the customers .
The target market for day care center can be segmented on the basis of various factors such as demography, psychographics, geography, benefits and behavioral segmentation.
Demographic Segmentation
Demographic segmentation involves the segmentation of the target market on the basis of demographic factors such as age, life cycle stage, education, gender, and income . The demographic segmentation for Day Care services includes single parents and couples that are parents to kids that are between the age group of three months to ten years of age. The demographic segmentation for daycare services includes family life cycle segmentation. The households make up majority of the target market segment followed by employer sponsored daycare subscriptions . The target market for the daycare segments includes households with a median income between $0-$25000 .
Geographic Segmentation
The geographic segmentation includes the segmentation on the basis of the geographical location . The geographical segmentation for the daycare center includes the customers that live in the Allentown area of the Philadelphia region.
Psychographics Segmentation
Psychographics segmentation includes the segmentation of the target market on the basis of the variables such as lifestyle, personality traits and interests . The psychographic segmentation for the daycare center facilities include parents who are looking for a secure and hygienic daycare for their kids that provide quality learning facilities to the kids. These target customers can be cautious parents that are primarily concerned about the health, safety and welfare of their kids.
Benefits Segmentation
Benefits segmentation divides the market on the basis of the benefits that the consumers derive from the use of a product or a service . The benefit segmentation for the daycare center includes the security and healthy learning environment that is provided to the children that are admitted to the daycare facilities in the center. The target consumers may be attracted to the daycare center on the basis of the security and the learning benefits provided by the center for the kids.
Behavioral Segmentation
The behavioral segmentation may involve the segmentation on the basis of the usage rate of the product or service or on the basis of the service or product attributes such as price . The behavioral segmentation for daycare facilities may involve heavy, medium and light users on the basis of the usage of the service. The heavy users may be the parents that use the services frequently such as late pickups and drops in addition to the normal services.
4.0 Strategy and Implementation Summary
4.1 Competitive Edge
The competition and feasibility study, price, service, documentation and reputation are critical success factors in the child care service industry. The profitability of the day care facilities largely depend on the extent of the marketing efforts and the operational excellence of the operators . Daycare services are a large labor intensive industry and therefore the availability of skilled labor is one of the key success factors in the industry.
My First Child Daycare will compete well in the market by offering competitive prices, high-quality childcare service, and leading edge educational programs with certified, college educated instructors.
Description of Competition
The competitors for the daycare center include all the established daycare centers that offer similar and competitive services for daycare facilities for the kids living in the region. The strength of the competition includes the established brand name in the industry and high reputation among the parents. The weaknesses may include the higher pricing structure for various facilities that are usually charged form the parents.
4.2 Marketing and Advertising Strategy
My First Child Day Care always welcome parent from any age groups, male of female, all races, every income level, not matter what resident they are coming from and even the tourists to the area. Every child is precious and in the day care everyone will be respected including the parents, the children and the facilitators. The business shall promote itself among the target consumers through modern digital marketing methods such as social media marketing, email marketing and traditional broadcasting media such as a radio. The reasons for choosing modern digital media such as website advertising through Google AdWords and search engine marketing and social media marketing on social media platforms such as Facebook and Twitter include the effectiveness of these medium in engaging with the target audience and the ability to influence the decisions of the target audience and increase the level of brand awareness at low costs.
4.3 Sales Strategy
My First Child Day Care will be concentrating on three different target customer segments. The first is full time working parents and students. This group is forecasted to account for 80% of My First Child Daycare. This group is growing at a rate of 30% and there are over 200 potential customers in a 10 mile radius. The second group of customers is drop in, customers who use My First Child day Care sporadically, whenever the needs arises. This group is growing at 20% and there are 60 potential families. The last one are those from the Department of Welfare, who pays with Community Services for Children, a payment that is directly to the day care, and the parent who pay out of their package.
4.4 Pricing Strategy
The business shall use penetration pricing strategy. The penetration pricing is an aggressive form of pricing in which the prices of the products and services are deliberately keep lower than those of the competitors to attract more customers in a shorter time . The initial pricing strategy shall be based on penetration pricing to attract maximum customers towards the daycare center.
At the later stages of the business, when the brand shall be well established, a competitive pricing strategy shall be used where the prices for the products and services shall be comparable to those of the competitors.
5. Contracts or Purchase Orders
The information I have provided on the milestones in the schedule of proposed development is the project goals and overall project progress. I am planning to maintain my start 4 level, and I carefully reviewed the timelines for start up and firmly believe that once I am completely funded I will be able to open the center.
Key Activities
I am keeping visible the key activities that must be completed.
- Leasing the local
- Obtaining all required permits
- Site preparation
- Developing operations and employee manual
- Hiring personnel
- Computer and software for the kids
- Vans to transport the kids
Chart: Milestones
The manager is the face of the company and is responsible for bringing the good employee on board. Being able to participate in developing the company’s strategic plan will give the idea of what is that the company need, so whoever is responsible to hire, employees will identify the need and select the correct person. Since I am working on my Business Administration Bachelor degree, I will have the preparation I need to manage the business. I will be available to lead, getting others to get the job done, maintaining morale, motivating subordinates, controlling, setting standards such as sales quotas, quality standards, or production taking correction action as needed. Additionally, I will be using the banking experience I have as an assistant manager. I am also, working on Earling Childhood Education, which will give me an idea on how to deal with the children, which could give me a secure success.
6.1 Description of Legal Status
The company is started as a sole proprietorship. The business was started in the year 2013.
7. Financial Plan
My First Child Day Care expects to raise 430,000 as its own capital, I am planning to borrow money off if needed to complete all the requirement to open the center and to cover all of the expenses for the first year.
The admissions to the day care center shall be full time or part time depending on the needs of the parents. The full time admissions shall cost parents $250 per month and part time admissions shall cost $125 per month that shall amount to a total of $3000 and $1500 per year for full time and part time admissions to the day care facilities.
The projected gross margin on the basis of the current expenses and sales of goods is 60 percent that is a healthy figure and thus the business shall be profitable in the long run.
The sales and marketing expenses are estimated at nearly 10 percent of the total sales generated by the daycare center. The operating expenses make 30 percent of the total sales of the daycare center.
The cash flow projection shows that provisions for ongoing expenses are adequate to meet the needs of the company as the business generates sufficient cash flow to support operations.
References
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