Adult Day Care Business Plan: ABC Adult Day Care Center

Executive Summary

ABC Adult Day Care will be a mid-sized company providing adult day care services to the residents of Boston. This facility will serve adults aged fifty years and above, offering community-based day health services for the elderly and disabled. Services include living assistance, nursing, therapy, meals, and social activities. The facility will be secure and safe, presenting the elderly with an excellent environment where their care needs are fully met.

ABC Adult Day Care will be a privately held organization headed by its founder, who has extensive experience in strategic business planning. A team of employees with extensive experience in adult care fields will support the daily operations of the facility. With the rising rate of inflation, many American families struggle to obtain quality supplemental care for the elderly. This trend creates growing demand for quality care services. In Hillsborough County, the population growth rate has hit twenty percent, leading to projections of significant market expansion in this industry (Plunkett, 2008).

Reputation, price, certification, and quality services are key parameters contributing to the overall success of the adult day care industry. ABC Adult Day Care will compete effectively by offering competitive prices, maintaining strong community standing, and delivering high-quality services. The company will open for business on January 1, 2014, beginning with an initial enrollment of twenty customers (Bryan & Rudd, 2011). It anticipates healthy income by the close of the first fiscal year and projects to triple revenue by the close of the third year.

The company's largest operating expenses will be compensation — according to industry standards — for highly qualified personnel, and rent for its facilities during the start-up period. ABC Adult Day Care intends to grow and open new branches over time; this growth is expected to be conservatively financed from existing cash flow. Accordingly, ABC Adult Day Care is making a significant personal investment in the business and seeks to match that amount through a commercial loan (Glassman & Denison, 2011).

Company Summary and Ownership

ABC Adult Day Care will be a start-up managed by its founder, who has extensive knowledge and experience in the adult care industry and has maintained an attractive reputation in this field. The founder is also capable of independently handling management and administrative responsibilities.

The business will begin as a sole proprietorship owned by the founder. As operations expand, the owner will consider re-registering as a private limited company to suit future business needs.

Start-up Analysis

The founder will handle daily operations and will hire an experienced set of personnel to help ensure the success of the venture. Start-up expenses will be approximately $5,600, inclusive of advertising, legal, and related costs. An additional $95,000 will be needed as start-up assets. Start-up expenses will be financed by the owner's personal funds, supplemented by a loan (Davis & Lynn, 2010).

The start-up requirements are as follows:

Start-up Expenses: Legal expenses: $1,500 | Advertising materials: $500 | Office equipment: $350 | Activity supplies: $400 | Food supplies: $700 | First aid and related supplies: $450 | Sanitary equipment and supplies: $300 | Bedding: $400 | Miscellaneous: $1,000 | Minimum start-up cash: $5,600

Start-up Assets: Total cash required: $80,000 | Other current assets (vehicle): $15,000 | Long-term assets: $0 | Total assets: $95,000 | Total requirements: $100,600

Company Location and Facilities

ABC Adult Day Care will be located in Massachusetts, in the suburban Hillsborough County area of Boston. Initially, the facility will occupy a two-thousand-square-foot house in a residential neighborhood. It will have a fully fenced yard to guarantee safety and protection, quiet rooms for indoor activities and meal preparation, and books and other entertainment resources for residents (IBIS World Report, 2013).

Mission

ABC Adult Day Care aims to provide secure and safe adult day care at all times. Attentive personal care for every adult is imperative to the provision of a quality experience. Accordingly, sufficient personnel will be recruited and trained to ensure each adult receives appropriate supervision while in the facility (Davis & Lynn, 2010).

Keys to Success

The keys to success in this business are: (I) quality care; (II) flexible hours; (III) competitive pricing; and (IV) maintaining an untarnished and reputable standing in the community.

Standard Industrial Classification and NAICS Codes

The Standard Industrial Classification (SIC) code for an adult day care center is 83220101. The NAICS code for an adult day care center is 624120.

Industry and Competitive Analysis

The adult day care industry is moderately competitive in the Boston region. The area has over two hundred such facilities. The industry is characterized by two general facility types: the larger commercial style and the typical corporate franchise center, both of which operate at national and regional levels. Today, the largest adult day care facilities in the United States account for thirty percent of the market share. There are also various smaller, locally owned facilities. The largest facilities host at least one hundred adults, while locally owned centers operate at a maximum capacity of twenty adults (IBIS World Report, 2013).

Given the competitive nature of the industry, ABC Adult Day Care will employ two differentiation strategies. The first is a pricing strategy: the company's services will be priced at a maximum of ten percent below those of larger commercial facilities. The second is differentiated customer service. A customer-centered culture will be embedded throughout the entire organization. ABC Adult Day Care will invest in attracting and training the best workforce, since employees interact directly with clients and have the greatest opportunity to create positive impressions. This will encourage client loyalty and word-of-mouth referrals (Prieto, 2008).

Target Customers

ABC Adult Day Care will focus on two target customer segments: full-time working couples and drop-in customers. The full-time working couples segment is expected to account for eighty percent of the company's business. This segment is expanding at a rate of thirty percent, and within a ten-mile radius there are over one hundred potential customers. The drop-in segment will use ABC Adult Day Care sporadically as the need arises; this segment is expanding at twenty percent with approximately fifty potential customers (Plunkett, 2008).

Competitive Analysis

The adult day care industry is saturated overall. Drawing from the recent U.S. census, the City of Boston continues to expand despite existing adult day care facilities. ABC Adult Day Care intends to meet this local market need. National competitors such as St. Charles boast over one hundred branches across the United States, while the immediate local neighborhood has only three adult day care centers — one church-based facility in the area and one hosted by a local academy located several miles away. The immediate community currently has no adult caregivers on site. ABC Adult Day Care will differentiate itself from local competitors by offering an alternative to traditional adult day care approaches (IBIS World Report, 2013).

The market strategy of ABC Adult Day Care will be grounded in an activity-based care environment designed to engage the elderly. The facility will foster a community of elderly caregivers with the intent of improving the social and motor skills of residents and enabling them to cope with the challenges of aging (Glassman & Denison, 2011). The company will position itself at the local medical plaza, an area that has already demonstrated both interest and need for adult care services. The plaza currently houses a fitness center and a pediatric office with a clientele requiring adult care services. ABC Adult Day Care will position itself as the market share leader in adult care services in that area (Kornblum & Smith, 2011).

Main Competitors

XYZ Church Adult Day Care is an established business with a large church congregation. However, it may not appeal to clients of diverse religious backgrounds and beliefs.

Kick Care Center is an established institution offering adult day care services in the area. It is at a disadvantage because it is located outside the middle-income segment, and its building is prone to frequent flooding.