Faculty of management, UTU

Executive Summary
The Toddler Warehouse is a full-service child care/development facility that cares for toddlers from age three to five. The Toddler Warehouse will be concentrating on the upper end of the market: double-income professional parents. These personally ambitious parents are typically eager in terms of their children's development and will be willing to pay to have their children attend the best facilities. Through specialized training of the staff and innovative learning systems, The Toddler Warehouse is cutting edge in terms of child development. This curriculum, coupled with a custom designed facility and a low teacher: student ratio ensures a top shelf service for the children and the parents.

Objectives
The objectives for the years of operation include:

To create a service based operation whose primary goal is to exceed customer's

expectations.

The utilization of The Toddler Warehouse by at least 40 different families in the

first eight months.

To increase the number of client's served by 20% each year. To develop a sustainable, profitable, start-up business.

Mission
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.

Faculty of management, UTU

Company Analysis
The Toddler Warehouse, soon to be located in India, OR, will offer child care services for kids between the ages of three and five. The Toddler Warehouse will offer services from 6 a.m. to 7 p.m. The children will be exposed to a wide range of activities including arts and crafts, socialization, large muscle group activities, and general learning. The Toddler Warehouse will be priced out of some people's budget, but will offer a low student to teacher ratio and well trained staff.

Company Ownership
The Toddler Warehouse owned by Nikunj Tanti.

Faculty of management, UTU

Idea Generation
The Toddler Warehouse's start-up costs include:

The purchase of a four bedroom house and the appropriate renovations to bring it up

to code in reference to bathrooms and kitchen

Tables (depreciated) Office furniture (depreciated) TV and VCR (depreciated) Sleeping mats and pillows (depreciated) Outdoor playground set (depreciated) Storage bins (depreciated) Laundry facilities (depreciated) Computer system with printer, CD-RW, and Internet connection (depreciated) Copier and fax machine (depreciated) Art supplies Toys Medicine kits Kitchen supplies Brochures Cleaning supplies Legal fees Advertising costs

Start-up Requirements Start-up Expenses Legal Stationery etc. Brochures Art supplies 1,000 100 350 150

Faculty of management, UTU

Kitchen supplies Cleaning supplies Medicine kits Matts and pillows Other Total Start-up Expenses Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets Total Requirements

200 100 100 150 0 2,150

49,250 0 33,600 82,850 85,000

Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities 0 0 0 0 0
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2,150 82,850 85,000

33,600 49,250 0 49,250 82,850

Faculty of management, UTU

Capital Planned Investment Investor 1 Investor 2 Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding 85,000 0 0 0 85,000 (2,150) 82,850 82,850 85,000

Operation plan Services

The Toddler Warehouse offers Salem an upper-end child care facility for toddlers age three to five. The Toddler Warehouse offers a low teacher to student ratio, custom facilities, and innovative learning programs. The Toddler Warehouse hours will be a bit wider rage than normal business hours to accommodate the working parents, the target customer. The two income families have children, yet both parents work. The Toddler Warehouse is an innovative solution that acts as virtual parents, broadening the children's skills during the day. This is not a baby sitter facility. The children are engaged throughout the day, learning new skills and reinforcing already acquired ones.

Faculty of management, UTU

Market plan
The Toddler Warehouse will be offering child care/development for toddlers age three to five. The Toddler Warehouse will be targeting double income professional families who, because of work obligations, do not have the time during the day to care for their child. The Toddler Warehouse will be targeting families that are interested in something more than simple baby-sitting facilities; they would like the children to be enrolled in a program that offers development of many different skills including: socialization skills, arts and crafts, large muscle group workouts, reading, numbers, etc. Parents who are professionals, who are ambitious by nature themselves, are typically eager for their children to move ahead and are willing to pay for the best development care services for their children.

Market Segmentation
The Toddler Warehouse is targeting one specific customer group, the middle to upper class, two income professional families. This group of families has both parents working, not allowing them time to raise their child during the day. This group has the money for child care, and is willing to spend a little extra to get a higher level of care. This customer segment has already begun teaching its child advanced concepts like reading, singing, socialization, etc. The Toddler Warehouse will continue to develop the children's skills. This customer group is typically made up of two professional parents. This would explain why the parents 1) have the money for more sophisticated child care, and 2) are ambitious in terms of their children's learning and development.

Faculty of management, UTU

Market analysis Potential Customers Two income professional families Other Total 0% Growth

Year 1 Year 2 CAGR

9% 12,000 12,000

6.68%

0.00% 6.68%

6.68% 12,000 12,000

Target Market Segment Strategy

The Toddler Warehouse intends to concentrate on the double income working professional families because they are the segment that can most readily afford day care, are the ones who need day care because of their work obligations, appreciate the advanced learning and development The Toddler Warehouse has to offer, and lastly are a growing segment of our society. With both parents working, this segment needs some sort of provisions for the care of their child. While the Department of Labor indicates that over 50% of children are cared by relatives compared to 29% for a commercial day care center, our targeted group prefers a more structured learning environment. Relatives are great for nights out or weekends, but they do not compare to a structured program when it comes to the learning
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Faculty of management, UTU

and development that occurs at The Toddler Warehouse. Having both parents as professionals, they are ambitious with the development of their child and are willing to pay to get the best program for their prodigy.

Competition and Buying Patterns

There are many different competitors in the child care space. The Toddler Warehouse will only detail the direct or reasonably direct competitors, and will not detail the myriad of other service providers that offer some sort of child care option. The direct competitors are: 1. Established, often franchised, child care centers. These are typically larger facilities that offer care to a wide range of ages. The number of children serviced is usually quite large. The child care is adequate, although somewhat impersonal by virtue of its large size. 2. Small, home based child care. These competitors are people that have a child care facility based out of their house. The quality of these ranges considerably, some are great, some are subpar. 3. Medium sized companies. These are typically independently owned facilities. Some of these will handle a wide range of ages, others will specialize with a specific age group.

Strategy and Implementation

The Toddler Warehouse is targeting a very specialize niche in child care space. With this in mind, The Toddler Warehouse must then carefully communicate it's services if the company is to be patronized by this target segment. What will be communicated are The Toddler Warehouse's competitive advantages: specialized training of the staff and innovative learning programs. If the targeted parent hears and understands these advantages, they will more likely be willing to switch to The Toddler Warehouse's service. In addition, The Toddler Warehouse will be using tours of the facilities to sell its services. Tours in the industry are pretty standard. Most parents want to see a facility before they will send their kids there. The Toddler Warehouse's facilities are so good that

Faculty of management, UTU

they speak for themselves. Therefore, it will be a priority to get the parents to view the facilities and that will convince them.

Sales Strategy
The Toddler Warehouse's sales strategy will be targeting double income working professional families. These families have the money to spend on child care and these parents are much more likely to appreciate the advanced learning systems taught at The Toddler Warehouse based on Matt's thesis. The sales strategy will be based on a communication effort to explain the virtues of the program and how time at The Toddler Warehouse can speed up the children's development considerably. In addition to one on one explanation of the program and its merits, the prospective parents will be given tours of the facilities. The tour of the facility will serve two purposes: 1. The tour will be used as a way to impress the prospect of the facilities that The Toddler Warehouse has. These facilities were custom designed to achieve very specific educational goals and The Toddler Warehouse is immensely proud of the facilities. 2. The tours typically occur during the day and this becomes a perfect opportunity for the potential customer to view the care as it is occurring. This will serve to build a trust bond between The Toddler Warehouse and the parent who naturally is cautious about leaving the child with strangers to have the child cared for and taught the entire day. In essence, The Toddler Warehouse is letting the facilities and teacher/student interactions speak for themselves. Because of the high level of service, this is entirely possible.

Sales Forecast
The first two months will be spent renovating the house and bringing it up to specifications, both for the state health and license codes, and Matt's specifications. During this time, Matt will be finishing up the training program and manuals. Although Matt had designed an entire training program as part of his Master's in Education, he is re-working it so it is custom designed for his new facility.
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Faculty of management, UTU

The first week of the third month will be used for training of the staff. By the middle of the third month The Toddler Warehouse will begin accepting children for care. It is anticipated that the facility will be under-utilized until the eighth month. By then, word will have spread and the classes will be filling up quite nicely. From month seven on, there will be a steady, incremental increase in sales.

Sales Forecast Year 1 Sales Two income professional families Other Total Sales Direct Cost of Sales Two income professional families Other Subtotal Direct Cost of Sales 174,425 0 174,425 Year 1 3,489 0 3,489 335,458 0 335,458 Year 2 6,709 0 6,709 351,254 0 351,254 Year 3 7,025 0 7,025 Year 2 Year 3

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Faculty of management, UTU

Personnel Plan
The staff will consist of Matt working full-time, in a training and leadership role for the organization. During month three, the following staff will be brought on board: two teachers, two assistants, and a general help person who will help out with custodial, cooking, and laundry tasks. By month seven, two more assistants will be hired. Personnel plan Matt Teacher Teacher Teaching assistant Teaching assistant General help person Teaching assistant Teaching assistant Total People Total Payroll Year 1 24,000 30,000 30,000 20,000 20,000 15,000 12,000 12,000 8 163,000 Year 2 30,000 36,000 36,000 24,000 24,000 18,000 24,000 24,000 8 216,000

Financial Plan
The following sections will outline the important financial details.

Profit and Loss

The following table will indicate projected profit and loss.

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Faculty of management, UTU

Profit and loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll Sales and Marketing and Other Expenses Depreciation Licenses Utilities Mortgage Insurance Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

Year 1 174,425 3,489 0 3,489 170,937 98.00%

Year 2 335,458 6,709 0 6,709 328,749 98.00%

163,000 1,800

216,000 0

0 1,200 2,100 24,000 3,000 24,450 0 219,550 (48,614) (48,614) 0 0 (48,614) -27.87%

0 1,200 2,100 24,000 3,000 32,400 0 278,700 50,049 50,049 0 12,512 37,537 11.19%

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Faculty of management, UTU

Balance Sheet
The following table will indicate the projected balance sheet.

Balance sheet Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth

Year 1

Year 2

6,233 0 6,233

44,906 $0 44,906

33,600 0 33,600 39,833 Year 1

33,600 0 33,600 78,506 Year 2

5,596 0 0 5,596 0 5,596 85,000 (2,150) (48,614) 34,237 39,833 34,237

6,733 0 0 6,733 0 $6,733 85,000 (50,764) 37,537 71,773 78,506 71,773

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Faculty of management, UTU

SWOT Analysis
Strengths
The strength portion of a SWOT analysis needs to discuss the demand for the center's services. Single parents are usually workers who need child care, and there are many marriages in which both people work and are in need of day care for their children. In terms of a start-up, there is also the strength of having potential funding from local or federal government agencies eager to help improve access to quality child care. In terms of personal satisfaction, strength of this type of business is that it provides a creative aspect for the owner who is able to develop the theme and early childhood curriculum to be used. This strength works hand in hand with the contribution to the community you provide when you offer quality child care that enriches the lives of your charges.

Weaknesses
In your SWOT analysis, be objective about the potential weaknesses of your business model. This will help you prepare for challenges and avoid pitfalls later in the process. Start-up costs can be exorbitant, as they include a building with a kitchen, insurance, supplies and a marketing budget. You must also obtain licensing to run the operation and be in compliance with all local, state and federal laws. Don't forget to include the daily costs of running the business, including utilities and food. Finally, the maintenance of the center can be expensive with painting, repairs, replacement furniture and other supplies.

Opportunities
The potential opportunities associated with a day care business can be exciting. There is always the potential of growth, which includes not only more children but the possibility of additional buildings. Once established, the opportunity exists to partner with businesses in the area who could potentially subsidize the cost for employees who use your center. It is also feasible for you to provide care for children whose low-income families benefit from government programs, which could help ensure that you'll receive full payment.

Threats
The threats aspect of a day care center should focus on competition, especially from companies that offer in-house child care. There is also the possibility of lawsuits for alleged cases of neglect or abuse, which can happen even in the best-run and -staffed facilities. There is also the risk of high employee turnover and difficulties in finding qualified staff members.

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Faculty of management, UTU

Government Approval
Home daycares are ways of creating work-at-home businesses. Taking care of children from your home can be profitable and will create a warm, homelike environment for children to learn and develop in. The Maine government requires that several steps take place before it will certify and license your home daycare facility. Completing these steps will help you create a Maine government-approved daycare within your own home. If you want to start a daycare in Wisconsin, you can legally turn your home into a childcare center to open your business quicker and drastically cut the required start-up capital. The process for opening a family child-care center isn't as involved as opening an outside child-care center, but in-home day care centers must still ensure the safety, health and well being of every child in their care. According to Wisconsin's Department of Children and Families, DCF, family child-care licenses are usually issued within 60 working days after receipt of a complete application, satisfactory department investigation and approval.

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