sample business plan

Name

Tutor

Task

Date

Child Day Care Business Plan

Summary

In providing safe and nurturing environment for children, a day care centre, as defined in this business plan, is a start-up venture that I will launch to provide care for children between five and ten years. The centre will be licensed to provide care for about one hundred to one hundred and seventy children. By putting my focus on quality care, my centre is projected to achieve high enrolment and high-profit generations within months of operation.

Introduction

In the United States, these days, most mothers with preschool or school age children are employed outside the home. With these in mind, many parents have invented many ways to care for their children while they work. This has lead to the spring up of day care centres all across the United States.

Child care is a subject of major public interest. A concern that child care may be in short supply, not of good quality or maybe too expensive has made it into national debates over the years. Research has shown that most families with working mothers and preschool children purchase childcare. However, the type of child care used also depends on the family type and the financial status.

In a market where double income is becoming common, child care services are in soaring demand. This is obvious from the reality that there are over 250,000 licensed facilities making around $10 million in monthly revenue. With the growing labor force especially for women, the industry is expected to rise sharply over the years with the figures expected to go up by about 50%.

Within the area, there are around 9,000 children under the age of five years and around 11,000 between the ages of five and ten. Due to migration and other factors the annual population is expected to rise by around 5%, and this will mean increased opportunities for my business. Given that the business will be located near a busy business locality and a large residential area, I can expect to have a large number of clients within the locality and from other districts.

Given that I will be competing against three other licensed competitors, within a ten mile radius of my locality it will be easier for me to distinguish myself from the rest. I will put extra focus on different pricing structures, philosophy and marketing approaches. I am also aware that my community has a scarcity of licensed day care facilities, and this will enable me reach my enrolment projection within a very short time regardless of the small competition.

In a review of the competitor’s ability to maintain a low child to staff ratio, I will put assemble a team that will make sure we provide quality and enhanced services. We will work with the core principals of making a difference in the community and a distinguishable day care centre for choice to our consumers.

In preparation for the launch, I will put together a financial plan based on predictions for the first two years of existence including a start-up expense estimated at around $100,000. I will acquire a loan of around $70,000 to boost in the start-up costs. I will cover the remaining with my savings and through offering a stake in my business.

During the first year of existence, I intend to generate around $180,000 in sales revenue. In the second year, I plan to increase this figure by around 30%. After subtracting my expenses, the net profit for the first year will be expected to be around $19,000 with 9% percent net profit from sales. For the second year, I will anticipate a net profit of around $22,000 with a slight increase in the percentage net profit.

Like any other business, I will anticipate a negative cash flow for the first six to eight months. I will expect that, by the end of the ninth month the business would have gained momentum. The centre is estimated to have a net cash flow of about $7,000 for the first year, and the amount is expected to rise significantly. I will be expecting to have a cash balance of around $18,000 for the first year, and the amount will also increase in the following years.

Conclusion

Like any other business, childcare is a soaring business in the United States. Given the number of mothers who are family mothers or single mothers in the labor sector, the childcare business has so much potential growth. The rise in number of female-headed families has also contributed significantly to the growth in the child care sector.

With the potential opportunity of the scarcity in child care services in the United states, opening a child care centre will give me unlimited prospective to tap into the market and rake in profits while also providing services to the American citizens. Given that after subtracting the initial capital the profit margins are enormous. There are also potential clients, and the number will keep increasing depending on the quality of services offered. This becomes a lucrative business opportunity to invest.

Works Cited

"U.S. Child Day Care Services Industry." United States Child Day Care Services Industry Report (2012): 1-254. Business Source Complete. Web. 13 Apr. 2015.