Question

Sophia began her small family child care business (licensed for up to 8 children) in 2004. Her business is located in a lower to middle-class, diverse neighborhood in San Francisco. Soon after Sophia opened her program she reached full capacity and after several months she began a waiting list. By 2007, she was averaging three calls per month for child care spaces that she didn't have available. Sophia began to think about expanding because the demand for her child care services was clear, and because she knew that many of the low-income families were able to use state subsidies in the form of parent vouchers in order to pay for such services. Also, since Sophia already had a part-time teacher working for her she knew that by expanding she could promote that teacher to a full-time position and open up a new part-time position in her program. Most of all, Sophia enjoyed the personal satisfaction of knowing that she helped mold the children in her care and that she helped their parents create a good life for their kids. As a professional, this is her highest reward, and she believed that through expanding her program, she would be able to succeed in helping even more children and families in the community.

1. Please answer all the questions below:

• What is the ultimate objective of the expansion?

• Is there a clear market demand for the additional services?

• What materials and equipment are needed to make the expansion a success?

• What new costs or increased costs will the operating budget require? For example, how will staff salaries change, what additional food expenses will result, and what extra services might she offer for her new families?

• How will she market her expanded services?

• How should she finance the project in order to pay for the expansion costs?

Answer 1

1.Objectives:

• Make family child care business a competitive employer as demonstrated by exemplary retention rates, employee benefits, and job satisfaction.
• Increase unrestricted funding.
• Have a supportive, effective infrastructure that matches programmatic expansion including capital items, equipment and staff.
• Develop and provide information about technical assistance, education/training, compensation/retention and other supportive initiatives designed to improve the quality of child care.
• Advocate for improved standards, additional resources, increased compensation and supportive services to enhance the quality of child care locally, statewide and nationally.
• Conduct research about the quality of and factors that affect the quality of child care locally, statewide and nationally.
• Provide consultation and information to agencies, organizations and public policy-makers interested in improving the quality of child care.

2. Yes ofcourse there will be a marked demand for this as most of the families depend on the family child care sincemost of the parents are workers.

3.

To accomplish this goal, daycare companies must keep accurate financial records of the money coming in and going out. This includes the fees being paid by clients and the money being paid to employees and to purchase supplies. There must be a fine balance between spending enough money to run an effective business but not spending so much money that there is nothing left as profit. Small companies should consider hiring a bookkeeper to work a few hours a week to ensure that the records are correct.

4.New expenses are needed for the following:

! Toys and activity supplies. ! Food for the children in your care. ! Playground equipment. ! Wages for assistants or substitutes. ! Advertising. ! Legal and professional services for your business. ! Office and record-keeping supplies. ! Insurance for your business. ! Child care-related travel (a set rate per mile; the allowable amount will vary according to your location). ! Typewriter and/or computer. ! Utilities.

5.

DEVELOPING A MARKETING PLAN :

How you market your center may make the difference between its success or failure. Like any other business, a child care center provides a service that consumers want and are willing to purchase. Therefore, you will have to sell your service to the consumers (parents). Your marketing plan can help you achieve this goal. Know Your Customers Knowing your customer is the key to successfully marketing your center. The more you know about the parents' expectations, the easier it will be to develop a program that meets their needs, as well as the children's. The data collected in assessing your community's needs will help you do this. Also, develop a list of questions to help you identify what the parents will likely need, want and expect of your center. Use the data collected in your initial assessment and the survey to help answer those questions. The questions may include

1. What type of service will be provided?

2. What are the operating hours?

3. Do the operating hours match the parents' work schedule?

4. Is extended evening care available?

5. Where is the center located?

6. Is the location convenient and easily accessible?

7. How many staff members have degrees or training in early childhood education or a related field?

8. What is the teacher-to-child ratio (e.g., one adult to seven children)?

9. Will there be a curriculum? Will it be structured?

10. Have you or will you devise an activities schedule?

11. How will the center be operated? Hours? Staffing? Activities? Fees?

12. Have medical/first aid policies been developed?

13. What will the sleeping arrangements be? Once you have answered these questions, you will have a base from which to develop your marketing plan. The Marketing Program Many first-time business owners think that simply placing an advertisement in the local newspaper or a commercial on a local radio or television station will make customers flock to purchase their product or service. This is true to a certain extent, but hundreds, even thousands, of other possible customers may never learn of your business. Just think of the money you'll lose, simply because you didn't develop an adequate marketing program. There are certain factors you should consider when developing your marketing strategy. These are called the five Ps of marketing: ! Product/service -- The description of the product or service.

! Price -- An amount competitive within the market area.

! Place -- The description of the location, including its advantages, such as adequate parking, good street lighting, easy access.

! Promotion -- The method of advertising or highlighting the business.

! Persuasion -- The ability to sell your services and the business to the surrounding community.

6.

Financial data :

A. Application for loan

B. Capital equipment and supply list

C. Balance sheet

D. Break-even analysis

E. Income projection statement: -- Three-year summary -- Detail by month, first year -- Detail by quarter, second and third years -- Assumptions upon which projections were based

F. Monthly cash flow projection