Headstart Daycare & Learning Centre
Headstart Daycare & Learning Centre
Headstart Daycare & Learning Centre
Prepared for Marv Painter
MPAcc 809 (04)
Prepared by:
SibilChan
LindsayChiang
AnneLee
July 12, 2010
Table of Contents
1.0Executive Summary
1.1Value Proposition
1.2Sustainable Advantage
1.3Summary of Operations Plan
1.4Summary of Marketing Plan
1.5Summary of Human Resource Plan
1.6Summary of Financial Plan
2.0Introduction
2.1Mission
2.2Goals and Objectives
3.0Industry Overview
3.1Location Overview
3.2Child care Industry Overview
3.3PESTE Analysis
4.0Operations Plan
4.1Organizational Structure
4.2Composition of the Board of Directors
4.3Services Offered
4.4Hours of Operation and Daily Activities
4.5Supplier Analysis
4.6Site Layout
4.7Service Providers
4.8Capital Budget
4.9Working Capital Management
4.10Operating Capacity
4.1110-Year Projection
5.0Human Resource Plan
5.1Roles and Responsibilities
5.2Training Program
5.3Labour and Management Costs
6.0Marketing Plan
6.1Marketing Mix (4 P’s)
6.2Segmentation
6.3Target Market
6.4Positioning
6.5Competitor Analysis
6.6 Market Research
6.6Marketing Strategy
6.7Marketing Expenses
6.8SWOT Analysis
7.0Financial Plan
7.1Introduction
7.2Start up Costs
7.3Capital Structure
7.4Working Capital
7.5Projected Financial Results
7.6Investment Analysis
8.0 Appendices
9.0References
1.0Executive Summary
A British Columbia certified teacher and two business associates have decided to establish a child care facility to not only invest in a thrilling business endeavour, but to also assist in the increasing of the opportunities of children’s futures. The three business entrepreneurs will be providing $112,500 in equity financing, but wish to seek another $37,500 of equity from another potential investor. An additional loan of $50,000 from the bank will total the $200,000 required for initial start-up costs and resources.
1.1Value Proposition
Headstart Daycare and Learning Centre (the “Centre”) will offer full-day child care services to young families in the Clayton Heights area of Surrey, British Columbia. Clayton Heights is a growing young community that is surrounded by multiple elementary schools of the Surrey School District. There is an increase demand for a reliable infant and toddler group daycare as young urban parents commute to downtown Vancouver for work. The Centre will be the first group daycare facility in the area, providing age-appropriate learning opportunities to children in order for them to start to reach their full social, physical, and intellectual potential.
1.2Sustainable Advantage
The sustainable advantage of Headstart Daycare & Learning Centre will be achieved by providing a successful future for the children through our engaging and highly educational program planned and implemented by a certified British Columbia teacher. This is currently an area that is not served by other caretakers.
1.3Summary of Operations Plan
Headstart Daycare & Learning Centre will obtain a group child care provider license for children from infant to school age. Maximum capacity of the Centre will be set at 74 children, based on the projected floor plan of having four main child care rooms at the Centre. Attending children will be placed into one of the four rooms with children of similar age in order to establish suitable activities for their benefit. The Centre will be staffed with employees who have their Early Childhood Educator certification to provide the children with a highly interactive educational environment. A manager will also be on-site to ensure that day-to-day operations are run smoothly. Minimal working capital will be required, as revenues are primarily rendered from services provided by the staff. The company will receive funds from the prepayments of monthly daycare fees before salary payments are to be made to employees. Therefore, the company will operate with a negative cash flow conversion cycle.
1.4Summary of Marketing Plan
Ourchild care facility will be targeting parents who require full-day child care for their young children. These parents would also like to enrol their children in a centre that has an educational and stimulating environment such that their child can grow and have the best opportunities. Headstart Daycare & Learning Centre will become the first licensed group daycare facility in the Clayton Heights area. Promotion of the new child care centre will primarily come in the form of flyer distributions to new residential developments, community outreach programs, and hosting of open houses for interested families.
1.5Summary of Human Resource Plan
Headstart Daycare & Learning Centre will require a director and a manager. The director will manage the business formalities and administration required for the Centre. The manager will oversee the day-to-day operations of the Centre and provide assistance to the director. The number of educator and assistant educator employees required at the Centre is dependent on the quantity and ages of children that are present at the child care facility. Headstart Daycare & Learning Centre will ensure that they are staffed appropriately in compliance with the standards set-out under the British Columbia Child Care Licensing Regulation. Additional employees would also include a full-time chef to create wholesome nourishing meals and a part-time maintenance worker to handle any repairs required
The director is to receive a salary of $50,000 while the other employees will be paid a starting hourly wage of $10 - $18 per hour, depending on their position and qualifications. All employees will receive benefits in addition to their salary and wages. Total salary and wage expenses will be approximately $126,038 in the first year and are expected to increase at an annual rate of 2%.
Training will be provided to the manager, educators, and assistants and will be led by the director. Training will focus on the Centre’s teaching and child care philosophy and will include a briefing of the Centre’s policies and procedures, the code of conduct, training on the sign-in system, and job expectations for each of the roles. The director, manager, and certified educators are also expected to attend various professional development workshops throughout the year, compensated for by the enterprise.
1.6Summary of Financial Plan
Based on our preliminary forecasts, the Headstart Daycare & Learning Centre will sustain a positive cash flow within two years of operations. Over a 10-year period, the net present value provided by the Centre will be $26,094 based on a 20% rate of return. The internal rate of return is 22% over 10 years.
2.0Introduction
Headstart Daycare & Learning Centre will be known as the group child care facility in the Clayton Heights community that provides an enriching educational and interactive atmosphere for young children to develop into their full capabilities.
2.1Mission
Our mission is to provide a safe, educational and nurturing environment for children from infant to pre-kindergarten age during a parent’s work day in the Clayton Heights neighbourhood in Surrey, British Columbia. Our company will ensure a child’s well-being, by providing attentive care in daily activities through a highly educational program that will increase the child’s learning potential.
2.2Goals and Objectives
Short-Term Goals
The goals to be met within the first two years of operations include:
- Obtain a 60% operating capacity
- Gain name recognition in the Clayton Heights community as a daycare that provides an educational and stimulating daycare environment
Long Term Goals
- Reach an operating capacity of 65%-100%
- Obtain an annual return on investment of 20%
3.0Industry Overview
3.1Location Overview
Surrey, British Columbia
Surrey is the fastest growing suburb in Metro Vancouver, with a growth rate of 4% per year (Selected Trend Data for Surrey, 1996, 2001, 2006 –Statistics Canada, 2010). The median age of an individual in the city is 37 years old, signalling the presence of a young population. The city is populated by couples and families, as 35% of the population contain a couple with children and over 60% of the population are married or in a common-law relationship. Surrey is a city where working professionals reside as housing prices are lower than the metropolitan city of Vancouver. The booming demand for real estate is evidenced by the 23.6% increase in new active listings in Surrey from 2009 to 2010 (Fraser Valley Real Estate Board Statistics Package –Fraser Valley Real Estate Board, 2010). Although working professionals reside in Surrey, according to the 2006 Census, 76.1% of residents commute to work. There is an increase in the number of children in the area, as the Surrey School District is the largest school district in British Columbia and is one of the only few districts that is growing in the province (School District No. 36 (Surrey); 2010) The presence of a young and booming population where young professionals reside to raise their families presents a large market for a daycare.
Clayton Heights is one of the growing communities in Surrey where thereis a multitude of new residential townhouse developments housed by young families and working professionals. The nearby elementary schools are of the largest in population of the Surrey School District, and a new school, Adam’s Road Elementary, is ready to open in September 2010. As there is no group daycare facility in the area of an emerging neighbourhood, Headstart Daycare & Learning Centre will capitalize upon the opportunity to set-up in this location.
3.2Child care Industry Overview
Licensed child care providers in British Columbia are either designated as a family child care facility, a group child care facility, or a preschool. Daycares that fall under the family category are typically in the child care provider’s home, and can accommodate no more than seven (7) children. Children attending family daycare centres are usually from the residential neighbourhood and of varying ages, thereby having one group of children with differing skills and capabilities to cater to. Licensed group child care centres are not organized in someone’s residential home, but are usually in a community centre, church, school, or commercial building. Group child care centres typically have a license to accommodate an increased number of children based on their floor space available to the children and the number of common rooms. As group centres are able to service more children, children of similar ages can be assembled together for increased social interaction with peers of comparable developmental levels. Certified early childhood educators customarily facilitate the classroom of a group daycare. Some have an educational element to their daycare. Group daycares are also organized as either a private enterprise or a non-profit organization. Child care centres with a designation as a preschool are mainly different in two factors: educational module and hours of operation. Licensed preschools are only able to provide care for children for no more than four hours in a day. Majority of pre-schools, thus, open for sessions of two and a half to three hours. Preschools also typically focus on providing educational value to their students. Some preschools instruct even based on an educational methodology such as Montessori education or Waldorf education. Montessori education philosophy is based on the fact that a child’s own interests will allow for self-directed learning, and the educator is only present to support and remove barriers obstructing the child’s natural learning progressions (Montessori method – Wikipedia, 2010). A school with a Waldorf philosophy will teach children through the use of practical experiential activities (Waldorf education – Wikipedia, 2010).
Children from infant to four-years of age in Surrey comprise of approximately 6.2% of the population, 24,555 children (2006 Community Profiles – Census Subdivision, 2010). All these children require full-day child care from a responsible adult, whether it is from a parent, babysitter, nanny, or daycare centre. In the 21st century, there are an increased number of families that are stepping away from the traditional roles and having both parents work in order to earn income for the family. New Surrey elementary schools currently being constructed shows that there are an increasing number of children to the Clayton Heights area and that there is demand for child care facilities. Child care centres are also becoming early education classrooms, allowing children to partake in interactive activities to teach them early educational skills that are traditionally taught later in elementary school (McClure, 2010). This trend has come from the pressure that parents want their children to have early educational experiences in order to have a headstart to their intellectual and social well-being.
3.3PESTE Analysis
3.3.1Political Factors
The British Columbia child care industry is directly affected by the Child Care Licensing Regulations as set out in the Community Care and Assisted Living Act by the Province of British Columbia. These regulations outline the licensing and functioning conditions, health and safety requirements, prerequisites to staffing the facility, as well as other program standards for any BC licensed child care settings. Headstart Daycare & Learning Centre is restricted by these regulations in running their facility, especially in the maximum number of children that the Centre is able to accommodate and the number of certified early childhood educators needed to meet the ratio requirements of educators to children. It is essential that Headstart Daycare & Learning Centre specifically monitor for any changes to these regulations, and continue to abide with the British Columbia child care standards in order to keep their license to practice.
Currently, the Ministry of Children and Family Development in British Columbia provides child care subsidy to parents. The subsidized child care amount provided by the provincial government is dependent upon factors such as the parents’ income, the number of dependent children who requires child carein a family, and spousal information. A major part of Headstart Daycare & Learning Centre’s revenue stream comes in these child care subsidies received directly from the provincial government on behalf of the parent. A decrease in the amount of funding for child care would affect the Centre as parents may not be able to fund the governmental shortfall and they would begin to seek less expensive alternatives of child care.
The provincial government also provides a daily operating fund to child care providers to assist in the funding of the care of British Columbia children in a registered facility. This government subsidy provides $12 per day for children up to 35 months of age and $5.48 for 3 year-olds to kindergarten age (British Columbia: Ministry of Children and Family Development; 2010). This additional revenue stream greatly assists child care centres in covering the daily costs of child minding. Loss of this government funding may cause some facilities to operate in a net loss position, resulting in the risk of business failure.
3.3.2Economic Factors
As Canada continues to rebound from the worldwide economic downturn, there has been a reduction in spending of supplementary items that are believed to be excessive. Even though child care is considered a primary necessity for families, parents may be in search for daycare facilities that are more economical in order to make their dollar stretch further. This would affect the enrolment of children at higher-priced learning centres as parents may explore other family daycare settings that would not have such an educational component or choose a daycare that has decreased fees from meals and diapers being supplied by the parent each day.
3.3.3Socio-Demographic Factors
The British Columbia government has been putting a greater emphasis on education recently. This is shown by the Ministry of Education announcing in 2009 that full-day kindergarten will be available to all BC eligible five-year olds by September 2011 (British Columbia: Ministry of Education, 2009). This will affect child care facilities as those kindergarten children will only require care on a reduced time-frame of before and after-school care hours.
Another socio-demographic factor affecting the child care industry is that there is a declining birthrate (British Columbia Stats: Local Health Area Total Fertility Rates, 2009). Families are not having as many children, which, thus, affect the need for child care facilities for them. Some cultures also do not believe in sending their children into group daycare facilities, which would also decrease the need for child care from external groups.
3.3.4Technological Factors
The increased technological shift does not have a significant impact on the child care industry at the early childhood age levels. School-age children, though, are being exposed to technology at an earlier age. Many before and after-school child care programs in British Columbia do not have the capital funds to have increased technology resources for their programs. Child care has still been based on the social and development play through health and wellness, and physical activity.
Technology is, however, permitting parents to verify the well-being of their children through installed video cameras (McClure, 2010). The use of ‘nanny cams’ allows parents to surveillance their child’s activities with their child care provider, giving the parent comfort that their child is being taken care of appropriately. This technology has not yet progressed to the British Columbia child care industry, even though some daycares may desire to use in-house video cameras to prevent possible liability accusations.
3.3.5Environmental Factors
Cold and rainy weather conditions and climate changes would move outdoor child care attendees to an indoor safe play area. It is a current requirement of all licensed British Columbiachild care facilities to have both an outdoor and indoor suitableplay area for children. Thus, these environmental factors would not affect the child care industry.
4.0Operations Plan
4.1Organizational Structure
Headstart Daycare & Learning Centre will be incorporated under the British Columbia Corporations Act. The corporation will be owned and operated by AnneLee, a Canadian resident. Incorporation will provide the owner with limited liability, and will provide a reduction in the amount of taxes payable through incentives such as the small business deduction.
4.2Composition of the Board of Directors
The appointment of the following experienced and competent individuals will provide appropriate oversight for Headstart Daycare & Learning Centre.
Director –AnneLee is the owner and director of Headstart Daycare & Learning Centre. She is an internal board member who oversees the operations at Headstart Daycare & Learning Centre.
Early Childhood Educator –JaneJones is a certified Early Childhood Educator who has her own daycare, Little Galileos, in Port Moody, British Columbia.She has extensive experience in providing an educational environment for infants and toddlers. Jane will be a keyindividual in evaluating the integral parts of educational programs and other endeavours at the daycare.