Child Day Care Services Business Plan
Kid’s Community College aims to prepare students to excel as young leaders by combining a collegiate-based curriculum with first-class child care services. Unlike competitors, we offer advanced technology programs, after-school tutoring, and activities such as arts and crafts, dance, theatre, and gymnastics, all in one location.
Kid’s Community College is a privately held corporation run by owner Timothy Bernard Kilpatrick, Sr. Mr. Kilpatrick has 17 years of executive management and budgeting experience, as well as extensive knowledge of budgeting methodologies and strategic planning, including the Balanced Scorecard approach. His advanced degree in computer science drives our technology component. He will be supported in daily operations by an industry consultant, a campus director, and a VP of educational operations, all with experience in child care.
With inflation rising each year, American families now require dual or supplemental incomes, creating a need for quality child care services. The population growth rate in the Riverview area of Hillsborough County is over 14.6%, leading to expanding market potential for this industry. Price, service, certification, and reputation are critical success factors. Kid’s Community College will compete well by offering competitive prices, high-quality child care services, leading-edge educational programs with certified, college-educated instructors, and maintaining an excellent reputation.
This is a daycare business plan for Kid’s Community College, focusing on two subdivisions: ‘Lake St. Charles’ and ‘The Villages of Lake St. Charles,’ new upscale community developments within a 2 square mile radius with over 900 new homes. Our target customers are dual-income, middle-class families who value education and child care for their children, ages 4 months to 12 years.
We will initially enroll 13 students and project healthy revenues by the end of the first year, tripling by the end of Year 3. Our main expenses will be compensation for highly-qualified personnel, and rent on our facilities. We plan to grow conservatively, financing expansion from existing cash flow. We anticipate a net profit beginning in our second year.
We are investing significantly in the business and seeking a matching amount in the form of an SBA loan.
“Some of the best years in life are the time spent as a child and later our collegiate years…” As working adults in a fast paced society, we sometimes forget how precious and fleeting those years are.
With that in mind, imagine an alternative to traditional infant, day and after school care that not only met your child care needs, but also provided an activity based learning environment that mirrors those used at colleges, universities and vocational centers around the nation. A college community of professional care givers with the credentials to not only enhance your child’s social and motor skills, but to also teach them advanced studies in the arts and sciences found at institutions of higher learning. A collegiate-based curriculum tailored specifically for children, taught in a fun, nurturing care giving environment.
Now imagine this at a cost less than that of conventional day care and specific interest based children programs.
Kid’s Community College® is a start-up comprehensive community college exclusively for kids ages 4 months to 5 years and 1st through 5th grades. The College dedicates its efforts and resources toward ensuring top-rated care giving services coupled with a high-quality activity based learning environment tailored for children in these age groups. The College will respond to the needs of its parents and students with excellent care-giving and instruction, an advanced curriculum, flexible programs, local community involvement, and business partnerships.
The College has a strong commitment to accessibility and diversity. Its open door policy embraces all who desire to provide better quality care, preparedness, and education for their children. The College works to provide affordable, first-class care-giving and education by offering a broad range of integrated programs and services and innovative learning approaches.
The College is committed to taking a leadership role in child care services, higher learning, community services, and promoting cultural diversity. Kid’s Community College® directs its activities towards student success.
## Objectives
1. Sales increasing to almost double first-year sales by the end of Year 2.
2. Maintain a high raw gross margin by the end of Year 1.
3. Open second campus by the end of Year 1.
4. Begin franchise effort by end of Year 3.
## Keys to Success
The keys to success for KCC are:
– Marketing: differentiating KCC’s care giving and educational services from traditional daycare offerings and interest activity programs.
– Service quality: care giving and educational programs provided by degreed and certified educators, child care workers, tutors, and subject matter industry professionals in a technologically advanced first-class collegiate environment.
– Reputation: maintaining a highly regarded reputation for excellence in care giving, education, and community involvement and being the employer of choice in our market for child care and educational talent.
– Profitability: controlling costs and managing budgets in accordance with company goals, adhering to strategic business plans for growth and expansion, and reinvesting in the business and its employees.
Kid’s Community College® – Lake St. Charles Campus will be located in Riverview, FL. The College will employ six fundamentals that will serve as the driving force for the services offered:
– Premier Care Giving Services
– An Activity Based, Children Structured Collegiate Curriculum
– Advanced Technology and Developmental Programs
– Trademarked General and “Continuing” Education Mentoring and Tutoring
– Learning Services
– Community Advancement and Involvement
The Lake St. Charles campus is a newly constructed, 3,600 square foot facility in the Lake St. Charles Medical Plaza and will be developed meeting strict KCC design standards, under close supervision of Hillsborough County child care Licensing.
## Start-up Summary
The college founder and president, Mr. Kilpatrick, will oversee fiscal responsibility, employing an independent CPA for financial oversight. A Campus Director will be hired to handle day-to-day operations of the facility and will work collaboratively with the silent partners and other campus personnel to ensure a successful business venture.
As reflected in the table below, the estimated start-up costs for KCC will be $39,450. These costs will be financed solely by the owners’ personal cash funds and optional credit lines. An anticipated $60,000 SBA guaranteed 5-year loan will be used as working capital. Future expansion, growth, and franchising strategy will be self-financed.
Kid’s Community College® offers upscale child care services and a collegiate-based curriculum designed for kids ages 4 months to 5 years and 1st through 5th grades. Operating hours are Monday through Friday, from 6:45am to 6:30pm, with observance of major legal holidays. KCC provides premier child care services that enhance traditional methodologies and integrate extracurricular interests, such as arts and crafts, dance, theatre, and gymnastics. The curriculum is tailored for children and mirrors the arts and sciences taught at colleges and universities. KCC offers state-of-the-art technology programs to prepare students for the technology age. It also provides general and continuing education programs for homework assignments and future educational endeavors. Finally, developmental programs reinforce social, listening, independence, and motor skills for future interactions.
In addition to extensive services and curriculum, each campus also offers weekend specialty classes for children and adults, planned family activities, and children’s birthday party hosting services. KCC is located in a new medical arts plaza, which has shown a need and interest for child care services. Collaborative partnerships with local businesses position KCC as the market share leader in child care services.
Kid’s Community College® offers four basic services: full-time child day care, part-time/after-school care, after-school tutoring, and drop-in care. The college will remain flexible to meet the needs of the community.
In the Riverview, FL area, there is a need for quality child care services due to an increasing number of dual-income families. Market demographics support the establishment of Kid’s Community College® within a 10-mile radius of Riverview.
The market segmentation includes full-time working couples, after-school care, and part-time workers/drop-ins. Full-time working couples provide a consistent revenue base, while after-school care attracts profitable business clients. Part-time workers and drop-ins make up a small percentage of revenues.
Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Potential Customers Growth CAGR
Under 5 Years 6% 2,665 2,825 2,995 3,175 3,366 6.01%
5 to 9 Years 6% 2,865 3,037 3,219 3,412 3,617 6.00%
10 to 12 Years 6% 2,771 2,937 3,113 3,300 3,498 6.00%
Total 6.00% 8,301 8,799 9,327 9,887 10,481 6.00%
Target Market Segment Strategy
The target market for Kid’s Community College® is full-time working couples. Referral marketing, direct-mail campaigns, and community activity days will be the primary types of marketing strategies utilized. Maintaining and enhancing reputation with families and in the community will be crucial in obtaining planned market share growth of this target market.
Market Growth
According to US Census 2000 data, the population growth rate for Hillsborough county is approximately 2%, reflected in the market analysis summary. However, the Riverview area of Hillsborough County is experiencing a residential construction boom, yielding over a 14.6% growth. This is supported by data obtained from the Hillsborough County Building Permits office and is included in the appendix of this plan. This suggests that more families continue to move into the Riverview area, becoming potential customers.
In our market analysis, we suggest a modest 6% yearly growth in the number of potential customers.
Market Needs
With inflation rising each year, the typical American family now requires dual or supplemental incomes. This trend has created a need for quality child care services. We do not see this model changing in the foreseeable future. In fact, based on the growth in the Riverview area, specifically the new Lake St. Charles and Village of Lake St. Charles communities, we expect the need to increase.
Market Trends
Currently, there are more family caregivers than licensed child care facilities nationwide. However, this business model can’t keep up with the needs of the growing child care industry. In the family caregiver paradigm, space is limited and the quality of care is questionable – often viewed as only slightly higher quality than babysitter services.
Service Business Analysis
Kid’s Community College® is in the child care services industry, which includes several models:
1. Licensed Child Care Facilities: Business facilities that offer child daycare services.
2. Family Child Care Homes: Individuals that offer child daycare services in their homes.
3. Specific Interest Based Programs: Businesses that offer specialized instruction such as gymnastics, martial arts, and athletics.
4. Church Child Care Facilities: Religious organizations that offer child daycare services in their communities.
Competition and Buying Patterns
Price, service, certification, and reputation are critical success factors in the child care services industry. Kid’s Community College® will compete well in our market by offering competitive prices, high-quality child care services, leading-edge educational programs with certified, college-educated instructors, and maintaining an excellent reputation with parents and the community.
Main Competitors
1. Catholic Church Day Care:
Strengths: Large church congregation. Already established in the market.
Weaknesses: May not appeal to customers of different religious beliefs. Unlicensed facility. Non-accredited.
2. Martial Arts America – Kick Kare:
Strengths: Already established in the area. Martial arts offering with child care services.
Weaknesses: Location – outside of middle-income market. Non-educational offering. Building condition – prone to constant flooding.
3. Family Child Care Homes:
Strengths: Established in the market. "Personal" service.
Weaknesses: Capacity – only allowed a certain number of children. Non-professional stigma.
Business Participants
1. Licensed Child Care Centers: Kids Kountry, Lapetite Academy, Mary Go Round Child Care Center, and Bloomingdale Academy. While these centers are within the 10-mile radius target area, none are inside a 5-mile radius of the Lake St. Charles community. None of these facilities are nationally accredited.
2. Family Child Care Homes: Mindy Rumore FCCH and Stacie Dawn Hamann FCCH.
3. Specific Interest Based Programs: Martial Arts America
4. Church Child Care Facilities: Christian Day Academy (not licensed.)
Strategy and Implementation Summary
Kid’s Community College® will focus on two subdivisions: ‘Lake St. Charles’ and ‘The Villages of Lake St. Charles,’ new upscale community developments within a 2 square mile radius with over 900 new homes.
The target customers are dual-income, middle-class families who value the quality of education and child care provided for their children ages 4 months to 12 years.
Kid’s Community College®’s value proposition is easily distinguished from others in the market. We offer premium child care services measured by the curriculum and activities offered, experience and educational level of the instructors, community involvement, and community college theme.
Competitive Edge
We start with a critical competitive edge: no competitor in our market is offering our concept, quality of educational program, and child care services. Our educational approach is unique, and we have a resource with over 25 years of child care expertise and over 17 years of technology savvy. Our positioning on these points is hard to match, but only if we maintain the focus in our strategy, marketing, business development, and fulfillment. We should be aware that the tendency to dilute this expertise with bargain shopping could weaken the importance of our competitive edge, but we must continue to bolster our value proposition.
Marketing in the child care industry depends largely on reputation and referral. At Kid’s Community College®, that reputation will start within our community bolstered by our involved commitment to those we serve.
Promotion Strategy
We will depend on client referrals, community exposure, and direct mail campaigns to reach new clients. As we change strategies, however, we need to change the way we promote ourselves:
1. Advertising – We’ll be developing our core positioning message: "A community college for kids!" to differentiate our service from the competition. We will use direct mail campaigns, pre-enrollment drives, and local community newspaper advertising to launch the initial campaign.
2. Sales Brochure – Our theme and curriculum will help sell the college to prospective clients.
3. Direct Mail – We will send quarterly direct mail campaigns to the housing developments in a 10-mile radius of the campus. We will also offer monthly calendars for parents and the Lake St. Charles community, noting weekend family days and other open house approaches.
4. Community Involvement – We will be active in the Lake St. Charles community, sponsoring events at the community center for families and residents.
Marketing Programs
Catered open houses, parent survival days/nights, clubhouse pool parties, and weekend movie matinees are a few approaches we will utilize to reach out to our community. We will also develop and maintain partnerships with local businesses that cater to the needs of children.
Our pre-opening effort will include an application fee waiver, free children ID cards, T-shirts, and a community block party sponsored and hosted by Kid’s Community College®.
For families who value higher education and quality child care services, Kid’s Community College® offers a great alternative to traditional child care services and specific interest-based programs. Unlike those programs, KCC combines child care services with a modified collegiate-level curriculum, just for kids!
Pricing Strategy
Kid’s Community College® must charge appropriately for the high-end, high-quality educational and caregiving services we offer. Our revenue structure has to support our cost structure, so the salaries we pay to assure quality services must be balanced by the revenue we charge.
We will be price competitive in the market we serve; however, we will not subscribe to the "low price leader" concept. The quality of our service will support the prices we charge.
Sales Strategy
Kid’s Community College® will sell its community college theme, services, and offerings, separating itself from traditional daycare-only offerings.
We will be a one-stop shop for child care services, advanced learning, and specialized program offerings. We will also be active in the community, building a solid reputation with parents and the community. By succeeding in these areas, we expect to begin seeing an operational net profit in month nine of the first year, while increasing enrollment by 32% monthly for the first eight months and gradually thereafter until our maximum allowed capacity is reached.
Please see the detailed spreadsheet included in the appendix of this business plan for a run-down on forecasted sales.
For the first eight months of operation, Kid’s Community College® has assumed a conservative enrollment due to the fact that school, aftercare, and child care placement have already taken place for the school year, and most parents will be comfortable with their current arrangements. Consequently, we expect initial enrollment to be far less than anticipated future year levels.
A sales increase of approximately 32% each month is expected until the start of the next school term in August. While this forecasted increase seems large by industry standards, it is a good estimate based on initial enrollment. Going into years 2 and 3, we expect that our presence will be known, convenience factors considered, and we will then be considered a choice in August 2003. In fiscal years 2004 and 2005, 80% and 90% of full enrollment are assumed, respectively.
We expect to be open for business on January 1, 2003, starting with an initial enrollment of 13 students:
– 7 Full-time students at $115 each per week.
– 6 After-school students at $60 each per week.
– Drop-in revenue of approximately $100 per month.
Sales Forecast:
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Unit Sales | |||
| Full-time Couples | 199 | 455 | 512 |
| After School Care | 141 | 220 | 248 |
| Summer Camp | 26 | 29 | 31 |
| Part-time Workers/Drop-Ins | 12 | 14 | 16 |
| Total Unit Sales | 378 | 718 | 807 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Full-time Couples | $460.00 | $460.00 | $460.00 |
| After School Care | $240.00 | $240.00 | $240.00 |
| Summer Camp | $460.00 | $460.00 | $460.00 |
| Part-time Workers/Drop-Ins | $100.00 | $100.00 | $100.00 |
| Sales | |||
| Full-time Couples | $91,540 | $209,300 | $235,520 |
| After School Care | $33,840 | $52,800 | $59,400 |
| Summer Camp | $11,960 | $13,340 | $14,352 |
| Part-time Workers/Drop-Ins | $1,200 | $1,380 | $1,587 |
| Total Sales | $138,540 | $276,820 | $310,859 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Full-time Couples | $13.34 | $13.82 | $13.82 |
| After School Care | $4.56 | $4.75 | $4.75 |
| Summer Camp | $13.80 | $13.80 | $13.80 |
| Part-time Workers/Drop-Ins | $0.00 | $0.00 | $0.00 |
| Direct Cost of Sales | |||
| Full-time Couples | $2,655 | $6,288 | $7,076 |
| After School Care | $643 | $1,045 | $1,176 |
| Summer Camp | $359 | $400 | $431 |
| Part-time Workers/Drop-Ins | $0 | $0 | $0 |
| Subtotal Direct Cost of Sales | $3,656 | $7,733 | $8,682 |
Sales Programs:
Sales programs will include incentives for achieving quarterly financial and enrollment goals, completing probationary period, passing county inspections, and maintaining perfect attendance. Customer service awards will be given to employees who exemplify the mission of Kid’s Community College® and exceed customer expectations.
Milestones:
The table below highlights important start-up milestones, indicating their completion status, responsible parties, and budgets. We place strong emphasis on planning and will conduct monthly follow-up meetings to review plan-vs.-actual analysis and make necessary course corrections.
Milestones
Milestone Start Date End Date Budget Manager Department
Business Plan 8/1/2002 9/30/2002 $200 Tim Kilpatrick Department
Lease RFP 7/15/2002 7/30/2002 $0 Tim Kilpatrick Department
Site Selection 8/1/2002 9/15/2002 $0 Tim Kilpatrick Department
Architect Design 9/15/2002 10/1/2002 $0 Zimmer Department
Secure Additional Funding 10/1/2002 10/30/2002 $500 Tim Kilpatrick Department
Sign Lease 10/15/2002 10/30/2002 $4,500 Tim Kilpatrick Department
Personnel Plan 10/1/2002 10/30/2002 $0 Tim Kilpatrick Department
Curriculum Development 10/1/2002 12/31/2002 $500 Candice Harris Department
County Certification Req. 9/20/2002 12/31/2002 $100 Tim Kilpatrick Department
Licensing 12/1/2002 12/31/2002 $0 Tim Kilpatrick Department
Totals $5,800
Strategic Alliances
Kid’s Community College® will form professional alliances with Impact Fitness to offer Drop-In child care services while parents work out. We will also partner with Family Pediatrics to provide referrals of their existing customers, offering a discounted rate in both cases.
Web Plan Summary
The Kid’s Community College® website will be the virtual business card and portfolio for the college, as well as its online “home”. It will showcase the campus, curriculum, and activity calendar for the school. It will also provide an Internet background of the instructors, online projects posted by the students, the campus newsletter, and online enrollment.
The Kid’s Community College® website will be simple, classy, well-designed, and in keeping with the latest trends in user interface design. A site that is too flashy or uses excessive technology may not be supported by all browsers. The website strategy will focus on presenting a well-designed and informative Web presence that markets the Kid’s Community College® image, service offerings, and community commitment.
Website Marketing Strategy
The Kid’s Community College® website will embody the college’s mission. It will offer visitors the opportunity to "look around" the campus and give them a good idea of the level of quality and service they can expect from the college. The website will be mostly informative in nature, serving as a digital representation of our physical self.
Development Requirements
The Kid’s Community College® website will be developed by the college founder, Timothy B. Kilpatrick, Sr., who has over 17 years of Information Technology experience. Formation Technologies will host the site. The site will be developed using Macromedia Dreamweaver 4, allowing for support outside of Mr. Kilpatrick’s involvement. The initial maintenance of the site will be done by Mr. Kilpatrick.
Management Summary
The opening management team of Kid’s Community College® will consist of the founder, a silent partner, a campus director, and an administrative assistant. Gradual investments in the instructional staff will be made over the next 3 years as enrollment increases.
Organizational Structure
Kid’s Community College® depends on the founder, silent partner, Campus Director, and VP of Education Operations for management in the following roles:
Management Team
Owner/President – Timothy B. Kilpatrick, Sr.
– 17 years Executive Management (VP) and Budgeting experience
– Advanced degree in Computer Science
– Proven leadership and employee development ability
– Extensive experience with budgeting methodologies and strategic planning
– Balanced Scorecard approach
Industry Consultant – Carolyn Steverson
– 25 Year owner of Fat Albert Day Care Center
– Licensed child care facility owner
– Vast knowledge of Hillsborough County Child Care Licensing requirements and government supplemental programs
Campus Director – Candice Harris
– B.S. Degree in Education
– 2 years facilities administration/support experience with the University of South Florida
– 2+ years Regional Operations Manager
– 5+ years managerial/supervisory experience
– 3+ years grant writing, technical writing, workflow and process documentation experience
VP of Education Operations – Nitika Steverson-Kilpatrick
– Collegiate-level Public Relations education
– 5+ years customer service experience
– 8+ years child care industry experience
– Extensive theatre and dance background
Management Team Gaps
The present team requires Child Care Development Associate credentials to support our value proposition and meet 2004 Florida child care requirements. Currently, only the Campus Director and Industry Consultant have these credentials. The Owner/President and VP of Education Operations will complete the required course to obtain these credentials in January 2003. The college will require all full-time instructors to obtain this credential.
Regarding financial administration, we will retain a strong CPA to help the owner manage cash flow. The owner has the sense to listen to reason and deal with constraints, as guided by the CPA.
Personnel Plan
The following table summarizes our personnel expenditures for the first three years. Compensation will increase from approximately $57K in the first year to about $113K in the third. The plan aims to balance fairness and expedience while meeting our mission statement. The second and third year figures are assumptions for the Lake St. Charles campus only, reflecting 100% enrollment, a full staff of instructors, and a 5% payroll increase each year, which includes tuition reimbursement, pay increases, vacation pay, bonuses, and state required certifications.
Personnel Plan
Year 1 Year 2 Year 3
Campus Director $23,877 $25,071 $26,324
F/T Instructors $21,760 $61,440 $64,512
P/T Instructors $11,400 $21,600 $22,680
Total People 5 8 8
Total Payroll $57,037 $108,111 $113,516
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