Child Care Facility Business Plan

Child Care Facility Business Plan

Location and Regulations to be Met

As the contemporaneous society evolves and develops, the needs of children and parents increase exponentially. A most relevant example in this sense is the emergence of more and more specialized and well equipped day care centers. Just like any other businesses, opening a day care center has to follow certain specifications, which can in the end generate significant profits.

The new day care center would handle a total of 84 children, out of which 12 are toddlers and 72 are preschoolers; no infants will be accepted. It will function in the New York City, a highly modern city and with increasing needs for day care centers. New York has a population of over 8,274 thousand individuals and it is one of the most crowded cities on earth, with a density of 27,147 citizens per square mile (Census, 2000). The New York City represents the ultimate intersection of fashion, trends, technology and culture. They are the home of numerous sports events, arts events and movements, but also technological innovations.

New York hosts about 550,000 children under the age of five and providing specialized care for them is turning into a real problem. "Some people stay home with their children or turn to relatives or neighbors for child care. A few workplaces provide day care for their employees, but many New Yorkers turn to private centers, which can be a costly option. [...] for those who qualify, the city currently provides some kind of day care funding or program for about 1 in 5 of the city's children" (Stohr, 2002)

The educational facilities in the city generally care for the economically disadvantaged children, but most such initiatives are obvious in the schooling system, rather than kindergartens. More than 100,000 children are currently on waiting lists to be enrolled in the state system.

The requirements to opening a day care center in New York are provided by the Bureau of Day Care, the "regulatory agency for child care services (public and private) operating within New York City. The Bureau is committed to ensuring a safe and healthy environment for all children in child care" (the City of New York, 2008). They could be succinctly summarized as follows:

DOH (Department of Health) permits must be obtained for services operating with more than 6 children under the age of 6

If the children are younger than two, special DOH permits must be obtained

To get the permits, the day care must meet specifications of "space, equipment, program/group size, teacher/child ratios, educational background of teaching personnel and Education director, health examinations and immunizations for the staff and children, food service, admissions policies, and transportation" (the City of New York, 2008)

The employees at the day care will be screened as to identify their eventual involvement in criminal activities

The facility needs the written approval of the Bureau of Day Care, the Building Department and the Fire Department (the City of New York, 2008)

Opening and managing a successful day care center depends highly on the skills and capabilities of the employed individuals. Most day care centers operate with less than 20 employees. The average age of the child carer is of 34, as compared to 44 for other workers. 21% of the workers are younger than 24 (as opposed to 16% in other industries), revealing "the minimal training requirements for many child day care positions" (U.S. Department of Labor, 2008).

Section 2: Local Community and Day Care Philosophy

The need for day care centers is increasing and it is expected to maintain its course in the following years as well. This increasing need is basically fuelled by two forces. The first one is that the young parents have pleasant memories about the time they spent in day care and wish for their children to experience the same moments. Secondly, more and more young mothers choose to work outside the home, having as such to place their children in day care centers. These mothers understand the importance of socializing with other children and agree with the findings of social workers, which state that the years one to six are the most important in the future development of the child. "Social researchers have found that the most important years in a child's development are those from one to six. Thus, the exposure to the world in which he lives, the instruction he receives, and the habits he forms during those years, definitely affect his ability to learn and properly adjust as he progresses on through his years of formal education. For mothers of today - usually better educated than their mothers - are more aware of these factors and wanting the best for their children, are demanding the structured pre-school education and learning stimulation offered by modern day care centers. This is an honest desire of the mothers of pre-school age children - even those who aren't forced to work outside the home" (Power Home Biz, 2008)

As a result, the demand for day care centers is increasing as the demands of the local communities increase. In New York for instance, there are about 47,000 officially estimated children, still waiting to be enrolled in the preschool program within the state facilities; the non-state organizations have estimated much larger numbers. "The number of child care openings has not increased since 1998, and children's advocates estimate that an additional 100,000 New Yorkers are eligible and in need of affordable day care. The situation will likely get worse" (Stohr, 2002). The number of state owned day care centers has been recently decreased as New York's debt increases. The large employers have opened day care centers for the children of the employees, but these are far from solving the issue. It is also true that the new day care center could encounter competition from these large corporations, which open day care centers where the employees can leave their children. However, two facts make the day care centers in corporations less of a threat. First of all, only few companies offer this benefit. Secondly, most parents have revealed a tendency to take their children in day cares far away from their work place, rather than near it or within it (Power Home Biz, 2008). From this standpoint then, combined with the local needs, the new day care center stands increased chances of retrieving a positive outcome.

Once the decision to open the day care center has been made in the context of the needs and wants of the community, the founders have to set a mission and a philosophy. In doing so, they could study the philosophies of other centers. Among the preschool centers in the New York City, one could point out Bright Horizons or the Building Blocks Play Group. "At Bright Horizons, we develop programs to make sure we work together in the exciting adventure of growing a great child in a caring and learning community. The World of preschool children builds upon established foundations for learning while focusing on the children's newly emerging and advanced use of language, mathematical reasoning, and scientific thought" (Website of Bright Horizons, 2008). The founder of Building Block Play Group stated: "I and my assistants will be conducting special lessons and projects where the children will learn through several mediums such as cooking classes, science exploration and arts and crafts. I value and understand how important individual care and small group size are to the education and well being of children, so I maintain a very low student to teacher ratio" (Website of Building Blocks Play Group, 2008)

The two philosophies are both attractive, but also different, one emphasizing on creativity and fun and the other on discipline and performance. The philosophy of the new day care center should state that the focus is at all times on the child and his educational and emotional development.

Section 3: Budgeting

The budget planning part is crucial for the ultimate success of any business. The estimates have to be as close to reality as possible and objective. These have to take into consideration the real costs of caring for a child. Children Now estimated that in 2005, the costs of caring for a preschool child within the family was of $7,730 per year; caring for a preschooler within a specialized day care center totalled up to the annual amount of $6,940 (Children Now). The lower cost of taking the child to day care rather than keeping him at home is yet another reason why the day care will be successful.

Start-up Budget

Expenses

Amount

Personnel (costs prior to opening) 25,000

Occupancy 58,000

Down payment or purchase of building 85,000

Remodelling costs

Rent deposit

Utilities deposit

Equipment

Office

Program

Installation fee

Supplies

Program 1,000

Office

Housekeeping (toilet paper cleaning supplies) 50,000

Food service

Miscellaneous

Advertising

Food (first month)

Legal and professional fees

Operating cash

Insurance

Depreciation

Expenses

Income

The day care will employ 28 staff members, each one of them to care for three children. The costs of recruiting and hiring these individuals could raise up to $25,000. The founder will purchase the facility, rather than rent it and will pay up to 85,000 for down payment. The costs total up to $587,980 and the expected income is of $705,600, revealing a net profit of $117,620 after the first year of operations. Part of the investment will come from the economies of the founder, the rest remaining to be gathered from bank loans. Contracting bank loans is the most suitable solution at this time as issuing stocks would require additional expenses. Foremost, there would be no guarantee the sum would be raised and the shareholders would get to become involved in the organization's activities. Also, the dividends granted to shareholders are seen as profits and as such taxed by the federal budget; credits on the other hand are seen as debt and are not taxed. As such, even if contracting bank loans does have some limitations, at the time given, it represents the most suitable course of action. The founder would also discuss with local corporations and try to get sponsorship contracts; he would also bring the matter in front on the state officials, which could offer subsidies to encourage preschool education and try to resolve as such the day care crisis in New York.

Section 4: Functioning Regulations

At the basis of a proper functioning of the cay care center sit several rules and regulations, organized under the code of conduct for the staff members and the enrolment regulations for the children. These could be succinctly presented as follows:

Internal code of conduct all children will be treated equally the staff members will always be patient and polite to the children and will never get angry and lash out at the children creativity will be encouraged at all times and watching television is forbidden reading and other personal activities are prohibited throughout the program carers have to be at work at 8:00 A.M. As the children arrive at 8:30 A.M.; they leave at 5:30 P.M. And the carers can leave at 6 p.m.

A children will have a nap time between 12 a.m. And 2 p.m., during which time the day care workers will gather the toys, clean the tables and prepare the facility for the second part of the daily activities if a child psychiatrist is to be hired, the staff will constantly communicate with him the workers will develop a weekly report on the children and will communicate it to the parents

Regulations for the children all enrolling children will present the birth certificate and a brief curriculum of other educational facilities they have attended, if any parents will also be asked to complete a form, asking them of matters related to the children and the day care center personal matters will refer to the religion of the child, any sicknesses or allergies, troubles in adjusting, or previous socializing practices; all these will have the purpose of gathering information as to best treat the child, rather than pry in the private lives of families; all data will be classified and undisclosed to tertiary parties matters related to the day care refer to the expectations of the parents, the capabilities and means used to satisfying these expectations, or the clear establishment of the payment date and method children will have to be kind to one another and disobedience and bad behavior will be reported to the parents; three negative reports will lead to a suspension and five negative reports will lead to expulsion if such a need arises and parents wish for it, the day care could hire a child psychiatrist to handle more delicate matters, such as the divorce of the parents, the loss of a dear one, adaptation issues and so on the regulation codes will also contain clear specifications on the repercussions to parents, children and employees if they fail to meet the rules.

Section 5: Evaluation final part, but an ongoing one and highly useful for the continued sustained development of the day care, is that of evaluating the performances. Evaluations will be mostly focused onto three primary concerns: staff, curriculum and health.

The evaluation of the staff members will occur every six months, or whenever this is necessary. Prior to actually hiring a worker, he or she will be subjected to several tests, including personality, aptitudes or knowledge. The evaluation will also have the purpose of renegotiating the wage of the employee, but the primary scope will be to analyze how the actions and skills of the worker affect the children. An evaluation part will include organizing fun questionnaires to be handed in to the children. This will teach them early on to be fair, objective and honest. Questionnaires will also be given to parents and the rest of the workers. The employee will be evaluated based on the responses.