For this assignment, I chose to analyze and comment on a Day Care Business Plan for “The Toddler Warehouse” ( We will utilize the SWOT tool (Strengths, Weaknesses, Opportunities, Threats) for the overall analysis, and then comment on the veracity and applicability of the plan for a professional day care center.
Strengths – The Toddler Warehouse (TW) will be “a full-service child care, development facility that cares for toddlers from age three to five.” This is clearly a strength since TW places the idea of “full-service” as predominant in its format and summary. TW will concentrate on “the upper end of the market: double-income professional parents.” Again, a major strength in that it is predominately this demographic type that both have the funds available for child care, and the interest and resources to see that their child is placed within a more nurturing and forward-thinking environment (See: Sciarra, 2002).
Weaknesses – While the business plan for TW does not directly reference the economy, one would ask for a bit more information on the actual structure of the demographic make up of the community, the areas from which they believe they will draw clients, the housing prices, median income, etc. For example, they have set their primary clientele at a relatively high-end (2 earners over $100K in income). TW wants 40 of those families within the first few months. How many Child Care centers operate within a 5 mile radius of their proposed location? Is their location in an appropriate pattern for the workflow for their demographic need (e.g. would it be easy for the demographic need to drop off their children on the way to work?). What are the rates and foci of the current Child Care Centers in the area? Why is another Child Care center needed? The plan, in and of itself, tells us what TW will do, but not what TW will do better or different than other, traditional care centers – an economic and client differentiation will likely benefit the owners of TW - not necessarily the children (For more on this, see: “Types of Care in
Opportunities – TW wishes to increase the number of clients served by 20% per annum. This seems quite a reasonable goal, but opportunities also exist then for more services, additional locations, additional staff. If, for example, the goal is 40 clients within 8 months, then by mid-year 2, TW only has to add 8 more clients to make its goal. This again would be dependent upon the area, region, and what was happening economically. Clearly, the excitement and expertise of the owners provides numerous opportunities to delve into the community for their chosen demographic. For example, since toddlers are not yet in school, this care would likely be year round. Opportunities exist for more enrichment for these types of families, because of the disposable income, and could easily be provided by TW: foreign language learning, music lessons and tutoring, greater art projects, sporting instruction at the team and individual level, outings and more enrichment that the parents would like to provide, but because of their busy work schedules, are not. Additionally, the type of client TM is courting is not necessarily an 8-5 type; more middle and upper management. Opportunities exist then for extended care (longer than 6pm), weekend enrichment programs, overnight care, the ability to transport the child to dental or medical appointments, and indeed, services offered to act more as surrogate parents than simply a traditional day-care. . . the idea being to become indispensable to those parents, causing more word of mouth advertising, (“We just could not do without them,”) which is likely to cause exponential, rather than geometric growth (See, “Children in Day Care,”
Threats – TW wishes to have at least 40 different family clients within the first eight months, which is highly dependent, as we’ve learned, on their geographic location, and the shopping and driving patterns of the type of client they engender. Threats come from all sorts of areas within the market. Depending on the aggressiveness and business acumen of the current Child Care centers, an advertising, price war could exist. This would tie up time, resources, funding, and focus for TW, yet if their break-even is a certain family makeup and number, then they must fight for that. Threats also include those of an economic nature: TW is planning on utilizing financing at a certain competitive rate, those rates, within an unstable economy, most especially for a new business, may be far higher than expected, and the amount of down-payment and owner contributions greater. This could have a very real impact upon the timing and efficacy of the plan. Additionally, depending on the community involved, the economic situation will likely have a clear effect upon the disposable income of the family structure in their demographic type, as well as the ability for active and effective advertising and promotion (See: “The Current Economy’s Impact on Child Care, 2009).
TW has an ambitious plan; while understanding that their Net Profit will be negative for Year 1, their growth in sales for years 2-3 allow them an 8-12% net.
The Toddler Warehouse's mission is to provide top level child care. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
Ambitious words, clearly in need of a more thorough defining, and greater analysis of current economic conditions would make this a more reasonable and sound proposal for bankers and investors.
References:
“Children in Day Care: ‘Family Values’ Are For Families With Money,’” cited in
Sciarra, D. and A. Dorsey, 2002, Developing and Administering a Child Care Center,
Delmar.
“The Current Economy’s Impact on Child Care,” 2009, cited in the National
Association of Child Care Resource and Referral Agencies, www.
Naccraa.org.
“Types of Care,” cited in