Safe Kids Child Care
Executive Summary
Opportunity
Problem
There are an increasing amount of families who have become dependent on two incomes, which has created the necessity of the child care industry. Increasing need means that there are more children that are in need of a safe enriching place to go.
Solution
Safe Kids Child Care will succeed by offering its clients’ children a safe and secure care environment, and close personal attention. The goals of the center are dual-sided: to help parents feel good about the care of their children, and to make it a safe, educational, and fun experience for the child.
Market
Safe Kids Child Care has a focus on meeting the local need for child care services within the 10-mile radius of Lynn. Children are taken in flexibly on either a full-time or part-time basis.
Competition
There are over 300 child care providers in the local area. The larger commercial chain child care centers, such as KinderCare, have a majority of the market share. These larger chains compete well because of a good reputation among the consumer market. Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.
Why Us?
Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.
Expectations
Forecast
Safe Kids is an exciting opportunity that provides safe and secure child care to the Lynn, MA neighborhood. Safe Kids will reach sustainable profitability over the next three years. Through a combination of well-priced services, outstanding customer service, and a well seasoned management team, Safe Kids will quickly gain market share and a reputation as a premier child care provider.
Financial Highlights by Year
Financing Needed
We plan on having $40,000 to start our business. Each owner will contribute $20,000 to our opening costs.
Opportunity
Problem & Solution
Problem Worth Solving
The child care market is quite competitive in the Boston area. There are over 300 different facilities. There are two general types of facilities. The larger style is commercially run, typically a corporate franchise center. These facilities are both regional and national. Currently, the four largest child care facilities in the USA account for 29% of the market. There are also many different smaller locally run and owned faculties. While the largest facilities can host between 20-100 children, the locally run centers typically have a maximum capacity of 20 children.
Problem Worth Solving
The child care market is quite competitive in the Boston area. There are over 300 different facilities. There are two general types of facilities. The larger style is commercially run, typically a corporate franchise center. These facilities are both regional and national. Currently, the four largest child care facilities in the USA account for 29% of the market. There are also many different smaller locally run and owned faculties. While the largest facilities can host between 20-100 children, the locally run centers typically have a maximum capacity of 20 children.
Target Market
Market Size & Segments
Safe Kids Child Care has a focus on meeting the local need for child care services within the 10-mile radius of Lynn. Children are taken in flexibly on either a full-time or part-time basis.
Full-Time Working Couples
The company wants to establish a significantly large full-time regular client base in order to establish a healthy, consistent revenue base to ensure stability of the business. Customer relations are extremely important, as it is imperative to keep the parents pleased in order to keep their children in the daycare center.
Part-Time Workers / Drop-Ins
Part-time workers and drop-ins comprise approximately 20% of revenues. While this market is not the primary focus, sufficient flexibility to handle this secondary market is important to producing supplemental revenues.
Competition
Current Alternatives
There are over 300 child care providers in the local area. The larger commercial chain child care centers, such as KinderCare, have a majority of the market share. These larger chains compete well because of a good reputation among the consumer market. Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.
Our Advantages
Child care competitive edge is the facility’s efforts in obtaining all appropriate licensing and certifications. Additionally, thorough pre-hire background screenings are performed on all individuals before hired for employment.
Keys to Success
Keys to Success
Keys to success for the company will include:
- Maintaining a reputable and untarnished reputation in the community.
- Quality care.
- Competitive pricing.
- Flexible hours.
Execution
Marketing & Sales
Marketing Plan
The differentiating effort will be benchmarked customer service. A customer-centric philosophy will be infused within the entire organization. Safe Kids will spend extra money to attract and train the best employees. This is especially important because it is the employees that interact with both the children and parents and will have the best chance to impress them enough to turn them into a loyal customer as well as to be vocal in telling their friends about their positive child care experience.
We will have a Social Media Campaign which uses Facebook and Linked in. We will have experts answer child care questions if the public wants. This gives the public confidence that we know what we doing. We will have customer reviews and allow our customers to talk to us.
Sales Plan
Safe Kids Child Care will make a significant profit through the excellent care of children. Even though Safe Kids charges less, the company will see profit within the first year due to beneficial word-of-mouth advertising. The company expects to double its’ clientele every six months, for the first 18 months.
Operations
Locations & Facilities
The facility will originally consist of a 1,300 sq. ft. house in a quiet, residential neighborhood. The yard will be fully fenced in, to ensure no one can either come in or wander away. The yard will be furnished with safe, entertaining toys, as well as a sandbox.
Milestones & Metrics
Key Metrics
Our Key Metrics are:
- Facebook page views, Twitter re-tweets, and new potential clients calling saying that a current client referred them.
- The number of children we take care of daily
- The number of children that are signed up for the monthly care
- The amount of training our staff has to take care of children and keep incidents down to zero.
Company
Overview
Ownership & Structure
This business will start out as a simple proprietorship, owned by its founders. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suit the future business needs.
Team
Management Team
Safe Kids will be lead by two child care industry veterans, Andrea Child and Danielle Freelander. Andrea has a sales, marketing, and management background within the industry, having spent seven years at The Toddler Warehouse. During her tenure at Toddler Warehouse, Andrea helped grow the business from $98,000 in yearly revenue to over $4.6 million. Andrea’s partner is Danielle Freelander who has a finance and administration background. Previous to Safe Kids, Danielle worked for The Rug Rat Vault, the seventh largest child care corporation in the USA. While Danielle was at The Rug Rat Vault as CFO, she was able to increase operating profits by 12%, an increase that is generally unheard of in this industry.
Personnel Table
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Expert Consultants (2.92) | $89,400 | $45,000 | $45,000 |
| Care Staff (9.61) | $246,000 | $374,400 | $467,256 |
| Managers (2.75) | $135,000 | $185,400 | $190,962 |
| Totals | $470,400 | $604,800 | $703,218 |
Financial Plan
Forecast
Key Assumptions
Our key assumptions are:
- There are children from families where both parents work or need to work. The children need somewhere safe and enriching where they can grow and make friends while their parents get a chance to get back to him.
- Adults sometimes have emergencies and they need to have a place to leave their children when they can’t be with them
- The community appreciates the it takes a village mentality. They appreciate we have resources and experts that will answer their questions. We assume they will come to us if they need help, we won’t go out of our way to advise.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Our Start-up Expenses are $3000 including:
Legal $1,000
Brochures $350
Stationery etc. $100
Activity Supplies $250
Food Preparation Supplies $300
First Aid Supplies $200
Cleaning Supplies $150
Nap Time Bedding $250
Other $400
Sources of Funds
Our two owners will put up 20,000 dollars each, totaling 40,000.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $696,000 | $875,000 | $1,092,000 |
| Direct Costs | $117,240 | $80,000 | $88,680 |
| Gross Margin | $578,760 | $795,000 | $1,003,320 |
| Gross Margin % | 83% | 91% | 92% |
| Operating Expenses | |||
| Salaries & Wages | $381,000 | $559,800 | $658,218 |
| Employee Related Expenses | $76,200 | $111,960 | $131,644 |
| Leased Equipment | $1,800 | $1,800 | $1,800 |
| Certifications | $2,400 | $2,400 | $2,400 |
| Utilities | $1,800 | $1,800 | $1,800 |
| Insurance | $3,000 | $3,000 | $3,000 |
| Rent | $24,000 | $24,000 | $24,000 |
| Startup Expenses – Listed in Use of Funds | $3,000 | ||
| Total Operating Expenses | $493,200 | $704,760 | $822,862 |
| Operating Income | $85,560 | $90,240 | $180,458 |
| Interest Incurred | |||
| Depreciation and Amortization | |||
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $6,845 | $7,219 | $14,437 |
| Total Expenses | $617,285 | $791,979 | $925,979 |
| Net Profit | $78,715 | $83,021 | $166,021 |
| Net Profit/Sales | 11% | 9% | 15% |
Projected Balance Sheet
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Cash | $139,493 | $168,779 | $190,402 |
| Accounts Receivable | $0 | $0 | $0 |
| Inventory | |||
| Other Current Assets | |||
| Total Current Assets | $139,493 | $168,779 | $190,402 |
| Long-Term Assets | |||
| Accumulated Depreciation | |||
| Total Long-Term Assets | |||
| Total Assets | $139,493 | $168,779 | $190,402 |
| Accounts Payable | $0 | $0 | $0 |
| Income Taxes Payable | $3,689 | $1,766 | $3,570 |
| Sales Taxes Payable | $17,089 | $15,277 | $19,075 |
| Short-Term Debt | |||
| Prepaid Revenue | |||
| Total Current Liabilities | $20,778 | $17,043 | $22,645 |
| Long-Term Debt | |||
| Long-Term Liabilities | |||
| Total Liabilities | $20,778 | $17,043 | $22,645 |
| Paid-In Capital | $40,000 | $40,000 | $40,000 |
| Retained Earnings | $28,715 | ($38,264) | |
| Earnings | $78,715 | $83,021 | $166,021 |
| Total Owner’s Equity | $118,715 | $151,736 | $167,757 |
| Total Liabilities & Equity | $139,493 | $168,779 | $190,402 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $78,715 | $83,021 | $166,021 |
| Depreciation & Amortization | |||
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | |||
| Change in Accounts Payable | $0 | $0 | $0 |
| Change in Income Tax Payable | $3,689 | ($1,923) | $1,804 |
| Change in Sales Tax Payable | $17,089 | ($1,812) | $3,798 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $99,493 | $79,286 | $171,623 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | $40,000 | ||
| Dividends & Distributions | ($50,000) | ($150,000) | |
| Change in Short-Term Debt | |||
| Change in Long-Term Debt | |||
| Net Cash from Financing | $40,000 | ($50,000) | ($150,000) |
| Cash at Beginning of Period | $0 | $139,493 | $168,779 |
| Net Change in Cash | $139,493 | $29,286 | $21,623 |
| Cash at End of Period | $139,493 | $168,779 | $190,402 |
By 
