Objectives
The Company plans on being open for daycare by Fall 2006. By the third year of operation we will expand the infant care, tripling the capacity.
The projected revenues are based on five infants and forty toddlers/walk–ins per day. We will be the only facility open seven days a week. Based on these occupancy rates, our first year revenues are projected at $415,000 with pre–tax profits of $166,000. These numbers will create a return of investment (ROI) of 10 percent during the first year. There is enough space to expand in the future, depending on demand.
Location Selection
At present, we have located a suitable building for purchase. The asking price is $399,000 which includes 3,000 sq. ft. of Commercial Floor Space (C.F.S.). A daycare facility does not require the use of C.F.S., the value of which is between $100,000 and $130,000 and can be sold off or used elsewhere by the equity investor. Renovation will be needed to the parking area, landscape and interior of the building. Many of the interior changes being made are to conform with ADA requirements.
This property is located at 2 Sandy Hollow in Sunset, Indiana (the old Weaver Cotton building).
MARKETING & SALES
Our target market is Sunset, Indiana families with young children. As of the most recent demographic analysis for the Sunset area shows 6.4 percent (458) of the population is between the ages of 0 and 5 years. We will target these families through some print advertising and a mass mailing.
Also, we have secured and exclusive agreement with Highland Brown Insurance (2,000 employees) making us their weekend daycare facility. All of their promotional literature will list Rachel's Clubhouse as the facility for any daycare needs. Parents will be given beepers to notify them if there are any problems with their child.
The print advertising will be placed in the local newspaper announcing the opening of the daycare. Along with the ads, we have a connection at the paper for a "Business Brief" article that will not cost any money, the best free publicity available in Sunset. We plan to have the article printed well in advance of opening to facilitate pre–enrollment.
Shortly following the release of the newspaper article, we plan to do a mass mailing to every box holder and household in Sunset and Crystal Lake. There are 7,000 boxes and 250 home delivery and at a rate of 11.2 cents per piece, this is a very affordable and effective way to advertise.
We have had enough inquiries to date, through word–of–mouth, to be completely pre–enrolled before opening the doors to the business. Obviously there is great demand for a facility such as ours.
