Executive Summary
The current business plan is prepared to determine the viability and possible success of a new business that will operate under the name Golden Child Daycare. The report begins with the situation analysis which indicates that this business has significant growth opportunities. The company will be located in Chicago, and its services will be available for all demographic segments in the market.
This business aims to provide high-quality services to children for developing their skills and abilities. The marketing strategy will be to target customers through social and print media. The operational strategy will be to implement a systematic registration process and carry out activities for the positive development of children. The company will use both debt and equity financing and is expected to achieve positive financial outcomes in the first year. The primary legal requirement of this business is licensing which will also help to ensure stakeholders’ engagement. Risk management strategies will include the use of advanced technologies to monitor and control all activities. The net profit margin of the business is expected to increase over the next three years.
Situation Analysis
The US child daycare industry is growing rapidly as more parents are seeking employment to earn a better living and their children’s education. The market size has increased in the last five years, and analysts predicted further growth of this industry. Figure 1 shows the market size in the previous five years.
Figure 1 depicts that higher growth is expected of the US child daycare industry in 2018. Therefore, the business idea to start a new daycare center in Chicago, Illinois is based on this growth forecast.
Customer Needs Analysis
Children are beneficiaries of a daycare center. However, parents are the primary customers who try to find the best option for their children. Therefore, the company can achieve its goal of success when it satisfies the requirements of parents (Mazhar 2015). The primary customer needs are communication and collaboration with the staff. Another need of customers is to have highly trained daycare service providers who are specialized in understanding the problems of children and resolving them appropriately and immediately. A hygienic environment in a daycare facility is also a significant requirement.
Vision and Mission Statement
The vision and mission of Golden Child Daycare are to provide extraordinary care of children to ensure parents’ satisfaction.
Aim and Objectives
The proposed business aims to provide high-quality services to children for developing their skills and abilities. The main objectives of the company are given below.
- To provide competent daycare and teaching services to children.
- To get a high return on investment in the next three years.
- To ensure effective grooming and development of children.
My personal objectives are to set up a business that would establish close relationships with the members of the community and also generate healthy earnings.
Marketing, Operational, and Financial Strategies
Marketing Strategies
The marketing strategy of Golden Child Daycare is simple as it will focus on print and social media to reach the target audience. The business will achieve its marketing objective by preparing and distributing banners, brochures, and newspaper advertisements (Baines, Fill, and Rosengren 2017). Golden Child Daycare will also promote its business by winning customers through social media which is a useful tool that saves time and cost.
Operational Strategies
The operational strategies of Golden Child Daycare are similar to that of any service business. The administration will ensure that the registration process of children, service providers, and other staff focuses on highlighting their respective functions. The owner will control business operations and make important decisions. The business process will begin with the registration of children/parents. The highly trained staff will provide daycare services to all children who will stay on the premises for a few hours.
Financial Strategies
The primary financial strategy of the owner of Golden Child Daycare is to generate capital including his equity contribution and a long-term loan from a bank. The target of the company is to enroll at least 250 children in the first business year to achieve the goal of high profitability. The management will prepare financial statements after the first three months to assess whether the business is meeting its financial objectives.
Sources of Finance
There are two primary sources of finance are equity and loan. The business will utilize both options to achieve its financial objectives (Ehrhardt and Brigham 2016). The owner will arrange half of the investment from private sources, and the remaining amount will be borrowed from a bank at an interest rate of four percent per annum.
Staffing Requirements
Golden Child Daycare is a servicing business that will require 20 employees to maintain consistency in its operations. The staff of the company includes teachers, trainers, cleaners, and administration. The qualification and skills requirements of all positions in the company are different according to the standards set by the owner. Salaries and benefits will be offered based on the market trend to ensure that employees remain motivated and satisfied.
Legislative Requirements
The legal requirements for this servicing business are strict because of its nature. The initial condition is to get a license to open a child daycare center. The legal requirements include details of insurance policy, property details, and biographic information of staff, etc. Furthermore, the business is subject to regular inspections to ensure that it meets the requirements for children’s safety and cleanliness.
Sales and Growth Forecasts
The proposed business will grow in the next three years based on the successful implementation of its marketing strategies. However, Golden Child Daycare expects to increase its sales by 50 percent during June-July every year (see Table 1) as more children are expected to register during summer vacations. Although sales will decline in August, they are still likely to be higher than the pre-summer period as shown in Figure 2.
Table 1. Monthly Forecast of Revenues of Golden Child Daycare.
Specialist Services
The business of Golden Child Care relates to the upbringing and development of children. Therefore, it requires a few special services that have high importance to ensure the growth and sustainability of this business in the long run. These special services are listed below.
- Uniformly scheduling various activities.
- Providing an educational platform for children.
- Conducting problem-resolving activities to manage children’s emotions.
- Communication-related activities to improve the interaction of children.
Stakeholder Engagement Strategies
The satisfaction of stakeholders is the key to success in this business line. The primary stakeholders are parents who register their children in daycare centers. They expect daycare centers to take care of their children and engage them in various activities that could help them develop confidence. It is vital that parents are satisfied knowing that their children are under the supervision of trained staff. The operational team will collaborate and communicate with parents every week to discuss the performance and schedule of the next week. The administration, teachers, and trainers will be work jointly to resolve the issues of children and their parents.
Risk Management Strategies
Risk management refers to the mitigation strategies that the administration can use to control business-related risks in a systematic manner (Ehrhardt and Brigham 2016). The risk matrix in Table 3 indicates the rating of various risks along with the mitigation strategies.
Table 3. Risk Matrix for Golden Child Day Care.
Performance Criteria
The evaluation of business performance is a critical task. The criteria set to assess whether the plan will generate the expected results are listed below.
- Customer response rate and return on marketing investment.
- Comparison of the actual revenue with the budgeted revenue.
- Fulfillment of business objectives including the number of registrations and growth in the next three years.
The projected income statement of Golden Child Day Care is presented in Table 4, which will help in assessing whether the financial objectives could be achieved or not. It should be noted that the projection is for the first business year.
Table 4. Income Statement for First Business Year of Golden Child Day Care.
The projections in Table 5 indicate that the business will achieve the goal of high profitability in the first year. The estimation of expenses is based on the review of similar companies in the region. Salaries and benefits will be offered according to the experience and workload of staff members. The business performance criteria include the projected net profit margin ratio as given in Table 5.
Table 5. Net Profit Margin.
The values of the expected monthly net profit margin in Figure 5 indicate that Golden Child Day Care will generate consistent profits till May. However, the margin will increase by 18 percent during June-July. The average net profit margin of the company will be 56.6 percent in the first year.
Bibliography
Anything Research. 2018. “2018 Market Analysis & Industry Outlook: Child Day Care Services.” Anythingresearch.com. Web.
Baines, Paul, Chris Fill, and Sara Rosengren. 2017.Marketing. New York: Oxford University Press.
Ehrhardt, Michael C., and Eugene F. Brigham. 2016. Corporate Finance: A Focused Approach. Mason: Cengage Learning.
Mazhar, Aymen. 2015. “3 Simple Ways for Daycare Centers to Improve Customer Satisfaction.” Customerservice.ae. Web.