Kitkat The Educator Business Plan

Published Date: 02 Nov 2017

Cathy Austin, Abayomi Adedokun, Addison Baker,

John Cooper and Lawson Doomah

MBA 662 Marketing

Executive Summary

Kitkat the Educator program aims to prepare disabled students to excel at a young age, by combining an exclusive based curriculum tailored specifically for children with intellectual Disabilities (ID) and children with Autism. Unlike our competitors, we offer advanced technology programs, after-school tutoring and activities such as arts and crafts, dance, and gymnastics.

Kitkat is a privately held corporation run by its owner, Cathy Austin, has 20 years experience in Special Education – Intellectual Disabilities (ID) and Autism (A). She is certified and highly qualified by the State of Georgia. She will be supported in daily operations by an industry consultant, a campus director and certified educators with extensive experiences in child care field. With inflation continuing to rise each year, typical American family now requires dual or supplemental incomes. This trend has created a need for quality child care development and training service. The population growth rate in the Atlanta area of North Druid Hill is now over 14.5%, leading us to anticipate expanding market potential for this industry in our local area. Price, service, certification and reputation are critical success factors in the child care services Industry. Kitkat will compete well in our market by offering competitive prices, high-quality child care services and leading edge educational programs with certified, college educated instructors and by maintaining an excellent reputation with parents and the community we serve.

This is an educational, developmental business plan for Kitkat program which will focus on the North Druid Hills and Briarcliff area. Which are new upscale community developments within a three mile radius, with over 300 new homes? Our target customers are dual-income, middle-class families who value the quality of education and child care we provide for their children, ages new born to 7 years old. We will open for business starting with an initial enrollment of 13 students. We project healthy revenues by the end of the first year, and expect to nearly triple that by the end of Year 3. Our biggest operating expenses will be compensation at industry standard rates for our highly-qualified personnel and rent on our facilities, improved for our purposes during the start up period. We would like to grow into four campuses, eventually, but growth is planned conservatively, to be financed from existing cash flow as we go. We anticipate a net profit beginning in our second year.

Mission

"Some of the best years in life are the time spent as a child and later our collegiate years…." As working adults in a fast paced society, we sometimes forget just how precious and fleeting those years are. With that in mind, imagine an alternative to traditional infant, day and after school care that not only met your child care needs, but also provided an activity based learning environment that mirrors those used at public schools. Professional care givers with the credentials to not only enhance your child’s early social and motor skills, but to also teach them advanced studies in the arts and academics found at institutions of higher learning. A collegiate based curriculum tailored specifically for children, taught in a fun, nurturing care giving environment.

Now imagine this at a cost less than that of the combination of conventional training services and specific interest based children programs. Kitkat the Educator is a start up comprehensive developmental and educational program, exclusively for children with Intellectual Disabilities and Autism, ages new born to 7 years old. The school dedicates its efforts and resources toward ensuring top rated care giving services coupled with a high quality activity based learning environment tailored for children in these age groups. The school will respond to the needs of its parents and students with excellent care giving and instruction an advanced curriculum, flexible programs, local community involvement and business partnerships. The Kitkat School has a strong commitment to accessibility and diversity. Its open door policy embraces all who desire to provide a better quality of care, preparedness and education for their children. The school works to provide affordable, first class care giving and education by providing a broad range of integrated programs and services and innovative learning approaches. The school is committed to taking a leadership role in child care services, higher learning, community services and promoting cultural diversity. Kit Kat directs its activities towards student success.

Objectives

Sales increasing to almost double first year sales by the end of Year 2.

Maintain a high raw gross margin by the end of Year 1.

Open second campus by the end of Year 1.

Begin franchise effort by end of Year 3.

Keys to Success

The keys to success for chitchat are:

Marketing: differentiating KK’s care giving and educational services from traditional training offerings and interest activity programs.

Service quality: care giving and educational programs provided by degreed and certified educators, child care workers, tutors and subject matter industry professionals in a technologically advanced first class environment.

Reputation: maintaining a highly regarded reputation for excellence in care giving, education and community involvement and being the employer of choice in our market for child and educational talent.

Profitability: controlling costs and managing budgets in accordance with company goals, adhering to strategic business plans for growth and experience and reinvesting in the business and its employees.

Company Summary

Kitkat first school will be located North Druid Hill, Atlanta. The school will employ six fundamentals that will serve as the driving force for the services offered.

Premier care giving services

An activity based, children structured curriculum

Advanced technology and developmental programs

Continuing education mentoring and tutoring

Learning services

Community advancement and involvement

Start up Summary

The school founder and president, Cathy Austin, will oversee fiscal responsibility, employing an independent CPA for financial oversight. A campus Director will be hired to handle day to day operations of the facility and will work collaboratively with the silent partners and other campus personnel to ensure a successful business venture. As reflected in the table below, the estimated start up cost for kitkat will be$39,450. These costs will be financed solely by the owners’ personal cash funds and optional credit lines. An anticipated $60,000 SBA guaranteed 5 year loan will be used as working capital. Future expansion, growth and franchising strategy will be self financed.

Start-up Requirements

Start-up Expenses

Legal

$1,000

Stationery

$250

Brochures

$500

Insurance

$1,500

Rent

$8,250

R&D

$500

Consultants

$1,000

Playground Equipment

$3,500

Playground Prep

$700

Playground Fence

$3,000

Furnishings

$7,500

Toys

$3,000

Build-out

$8,750

Total Start-up Expenses

$39,450

Company Ownership

KK developmental and training school is a privately held proprietorship owned in majority by its founder. There are also two silent partners, neither of whom own more than 10%, but will be active participants in daily operations, management decisions and consulting though they do not own a financial stake in the company. Once the operation reaches its anticipated growth and profitability goals, the school plans to franchise and will re register as a limited liability company or as a corporation, whichever will better suit the future business needs.

Services

KK training school offers upscale child care services and an advanced curriculum based designed for kids new born to 7 years old and pre-k to second grade. Normal operating hours will be 6:45am to 6:30pm. Hours of operation are Monday through Friday – with observance of all major legal holidays. Early drop off service will be offered as needed. KK exists to provide premier child care services that are aimed at enhancing traditional day care methodologies and integrating extracurricular interests (such as arts and crafts, gymnastics) into one comprehensive program. Our activity based curriculum is specifically tailored for children. We offer state of the art technology programs in leading edge facilities which help prepare students through main school homework assignments and provide a base of understanding and interaction to ensure success in future educational endeavors. Finally, our developmental program reinforces basic social, listening, independence and motor skills and prepares students for future related interaction. All of our learning and child care services employ technology, partnerships, professional services and other activities that support and promote higher learning. In addition to the extensive services and curriculum offered, each campus will also offer weekend specialty classes for children and adults and planned family activities in the community it serves. KK will also offer children birthday party hosting services, providing great activities for kids and an easy experience for parents. Activity instructors will be assigned for these events and will lead the activities, ensuring a memorable celebration.

Services Description

Upon its opening, Kitkat Developmental and training services will offer four basic services in the Atlanta area:

Full time child care

Part-time/After school activities

After school Tutoring

Prior to opening, the school will have a two month enrollment drive. Based on the market reaction to the drive, these services may be altered to meet the needs of the community. The school will always remain nimble enough to respond to the needs of the community in which it serves.

Competitive Comparison

The child care industry as a whole is saturated. However, based on US Census 2000 data, DeKalb County child care services provider listing is growing and has few licensed developmental and training centers for disabled children Kitkat School intends to fill this local market need. In the Atlanta area --North Druid Hills subdivisions mostly have retired resident homes respectively. There is only one other developmental facility in the North Druid Hills neighborhood. This one is on knob Dr. There is also three family child caregivers listed in the area, but none in the immediate community. Kitkat will differentiate itself from its local competitors by offering an alternative to these traditional day care approaches. The kitkat school market strategy is based on providing an activity based learning environment that is used in many major public schools. We will offer the community of professional caregivers with the credentials to not only enhances a child’s early social and motor skills, but to also teach them advanced studies in cognitive and social skills.

Technology

Since the school founder has an extensive information Technology background, it’s only natural that Kitkat’s school will employ and maintain the latest technology to enhance its curriculum, office management systems, payment processing and record keeping.

Marketing Analysis Summary

Kitkat’s developmental and training program offers services which are vitally important in today's fast paced, dual-income world. As an increasing number of families have become dependent on one income, the need for quality child care has skyrocketed. According to Atlanta Business Statistics, 84.6% of licensed child care facilities succeed and make a profit in their 1st year of operation. Nationally, this number is 66.7%.

There is no doubt, in the North Druid Hills area, that there is room and a need for a school for disabled children. Market demographics to support this statement can be found below.

Target Market Segment Strategy

The target market for Kitkat is full-time workers. Referral marketing, direct-mail campaigns and

Referral marketing, direct mail campaigns and community activity days will be the primary types

Of marketing strategies utilized. Maintaining and enhancing its reputation with families and in the community will be crucial in obtaining the planned market share growth of this target market.

Market Segmentation

Kitkat has a focus on meeting the local community need for child care services within the 5 mile radius of downtown Atlanta. Students will taken in flexible on either a full time or part-

time basis.

Full-Time Worker

The school will establish a significantly large, full-time, regular client base in order to establish the healthy, consistent revenue base which will ensure stability of the business. Customer and community relations are extremely important, as it is imperative to keep the parents pleased in order to keep their children in the school.

After School Care

Another large segment of the school's business will be in the after school care market. This client base will provide a higher profit for the school since instructor-to-student ratios are higher, and the students require more educational services, which are the primary focus of the school. By offering tutoring, and advanced studies in technology, arts and craft, the school will attract these profitable business clients, producing significant supplemental revenues.

Part-time Worker

Part-time workers will comprise less than 1% of the revenues. While this market is not a primary focus, sufficient flexibility to handle this market is important to the local 'word-of-mouth' marketing strategy.

Under 1 year, 2 – 4 years, 5 – 7 years

http://www.bplans.com/child_day_care_services_business_plan/images/e03bd64efd4148ce84b0872a713f60bc.png

Market Analysis

Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers

Growth

CAGR

Under 1 Years

6%

2,665

2,825

2,995

3,175

3,366

6.01%

2 to 4 Years

6%

2,865

3,037

3,219

3,412

3,617

6.00%

5 to 7 Years

6%

2,771

2,937

3,113

3,300

3,498

6.00%

Total

6.00%

8,301

8,799

9,327

9,887

10,481

6.00%

Market Needs

With inflation continuing to rise each year, the typical American family now requires dual or supplemental incomes. This trend has created a need for quality child care services. We do not see this model changing in the foreseeable future. In fact, based on the growth in the North Druid Hills area, specifically the Briarcliff communities, we expect the need to increase.

Market Trends

Currently there are more family caregivers than licensed child care facilities nationwide. However, this business model can't keep up with the needs of the growing child care industry. In the family care giver paradigm, space is limited and quality of care is questionable - in many

cases viewed as only slightly higher quality than babysitter services.

Service Business Analysis

Kitkat is in the child care services industry, which includes several models:

Licensed Child Care Facilities: Business facilities that offer child daycare services.

Family Child Care Homes: Individuals that offer child daycare services in their homes.

Specific Interest Based Programs: Businesses that offer specialized instruction such as gymnastics, arts and crafts.

Church Child Care Facilities: Religious organizations that offer child daycare services in their communities.

Competition and Buying Patterns

Price, service, certification and reputation are critical success factors in the child care services industry. Kitkat's program will compete well in our market by offering competitive prices, high-quality child care services, and leading-edge educational programs with certified, college-educated instructors, and by maintaining an excellent reputation with parents and the community in which we serve.

Promotion Strategies

We will depend on client referrals, community exposure and direct mail campaigns as our main way to reach new clients. As we change strategies, however, we need to change the way we promote ourselves:

1. Advertising--We'll be developing our core positioning message: "A community program for disabled kids!" to differentiate our service from the competition. We will be using direct mail campaigns, pre-enrollment drives, and local community newspaper advertising to launch the initial campaign.

2. Sales Brochure--Our theme and curriculum will help sell the college to prospective clients.

3. Direct Mail--We will send quarterly direct mail campaigns to the housing developments in a 10-mile radius of the campus. We will also offer monthly calendars for parents and noting weekend family days and other open house approaches.

4. Community Involvement--We will be active in the community, sponsoring events at the community center for families and residents.

Marketing Programs

Catered open houses, parent survival days/nights, clubhouse pool parties and weekend movie matinees are but a few approaches we will utilize to reach out to our community. We will also develop and maintain partnerships with local businesses that cater to the needs of children.

Our pre-opening effort will include an application fee waiver, free children ID cards, T-shirts and a community block party sponsored and hosted by Kitkat.

Positioning Statement

For families who value the importance of higher education and quality child care services, Kitkat offers a great alternative to traditional child care services and specific interest based programs. Unlike those other programs, that combines child care services with a modified collegiate level curriculum, just for kids!

Pricing Strategies

Kitkat must charge appropriately for the high-end, high-quality educational and care giving services we offer. Our revenue structure has to support our cost structure, so the salaries we pay to assure quality services must be balanced by the revenue we charge.

We will be price competitive in the market we serve; however, we will not subscribe to the "low price leader" concept. The quality of our service will support the prices we charge.

Sale Strategies

Kitkat will sell its community college theme, services and offerings, separating itself from traditional daycare-only offerings.

We will be a one-stop shop for child care services, advanced learning and specialized program offerings. We will also be active in the community, building a solid reputation with parents and the community. By succeeding in these areas, we expect to begin seeing an operational net profit in month nine of the 1st year, while increasing enrollment by 32% monthly for the first 8 months and gradually thereafter, until our maximum allowed capacity is reached.

Sales Forecast

The following table and chart give a run-down on forecasted sales. For the first eight months of operation, Kitkat’s school has assumed a conservative enrollment due to the fact that school, aftercare and child care placement has already taken place for the school year and most parents will be comfortable with their current arrangements. Consequently, we expect initial enrollment to be far less than anticipated future year levels.

A sales increase of approximately 32% each month is expected until the start of the next school term, in August. While this forecasted increase seems large by industry standards, it is a good estimate based on initial enrollment. Going into years 2 and 3, we expect that our presence will be known, convenience factor considered and we will then be a considered as a choice in August 2013. In fiscal years 2014 and 2015, 80% and 90% of full enrollment is assumed respectively. We expect to be open for business, starting with an initial enrollment of 13 students:

7 Full-time students at $115 each per week, 6 After-school students at $60 each per week and Drop-in revenue of approximately $100 per month.

http://www.bplans.com/child_day_care_services_business_plan/images/f4ade829306247929a83e93d743e2a50.png

Sales Forecast

Year 1

Year 2

Year 3

Unit Sales

Full-time Couples

199

455

512

After School Care

141

220

248

Summer Camp

26

29

31

Part-time Workers/Drop-Ins

12

14

16

Total Unit Sales

378

718

807

Unit Prices

Year 1

Year 2

Year 3

Full-time Couples

$460.00

$460.00

$460.00

After School Care

$240.00

$240.00

$240.00

Summer Camp

$460.00

$460.00

$460.00

Part-time Workers/Drop-Ins

$100.00

$100.00

$100.00

Sales

Full-time Couples

$91,540

$209,300

$235,520

After School Care

$33,840

$52,800

$59,400

Summer Camp

$11,960

$13,340

$14,352

Strategies Alliance

As mentioned previously, Kitkat will form professional alliances with Impact Fitness to offer Drop-In child care services while parents work out. We will also partner with Family Pediatrics to provide referrals of their existing customers. A discounted rate will be offered in both cases

Web Plan Summary

The Kitkat’s website will be the virtual business card and portfolio for the program, as well as its online "home."

It will showcase the campus, curriculum and activity calendar for the school. It will also provide for an Internet background of the instructors, online projects posted by the students, the campus newsletter and online enrollment.

The Kitkat’s website will be simple, yet classy and well designed, but at the same time, in keeping with the latest trends in user interface design. A site that is too flashy, or tries to use too much of the latest technology can be over-done, and may not be supported by all browsers.

The key to the website strategy will be presenting a very well designed and informative Web presence that will market the Kitkat’s image, service offerings and community commitment.

Website Marketing Strategy

The Kitkat’s website will embody the mission of the school. It will not only offer visitors the opportunity to "look around" the campus, but it will give them a good idea of the level of quality and service they can come to expect from the program.

Mostly informative in nature, the website will be a digital representation of our physical self.

Management Summary

The opening management team of Kitkat’s will consist of the founder, a silent partner, a campus director and administrative assistant. As the school grows, gradual investments in the instructional staff will be made over the next 3 years - beginning in June 2013 or as otherwise dictated by enrollment.

Organizational Structure

Kitkat depends on the founder, silent partner, Campus Director and VP of Education Operations for management in the following roles:

Management Team

Owner/President – Cathy Austin, The Owner/President will have overall fiscal responsibility, ensuring that the business is financially sound and attains its planned goals.

25 years in Special Education and 7 years of Leadership experience

Some experience in Computer Science

Proven leadership and employee development ability

Extensive experience with budgeting methodologies and strategic planning.

Industry Consultant - Carolyn Steverson. The Industry Consultant will be relied upon for her industry expertise, providing valuable insight to rules, regulations and governmental programs that may benefit the school.

25 Year owner of Fat Albert Day Care Center

Licensed child care facility owner

Vast knowledge of State Child Care Licensing requirements and government supplemental programs

Campus Director - Candice Harris. The Campus Director will be responsible for daily operations, curriculum oversight and management of all instructors, caregivers and tutors.

B.S. Degree in Education

2 years facilities administration/support experience with the University of South Florida

2+ years Regional Operations Manager

5+ years managerial/supervisory experience

3+ years grant writing, technical writing, workflow and process documentation experience

VP of Education Operations - Nitika Steverson

Collegiate-level Public Relations education

5+ years customer service experience

8+ years child care industry experience (her mother owns Fat Albert Daycare)

Extensive theatre and dance background

Management Team Gaps

The present team requires Child Care Development Associate credentials to support our value proposition and preparation for 2004 Georgia child care requirements. Currently, the Campus Director and Industry Consultant are the only members of the management team who have these credentials.

The Owner/President and VP of Education Operations will be enrolling in January 2013 to complete the six-month course required to obtain these credentials. Education for these two can't begin in this area until that time since it is a requirement that the college be open for business before the course work can begin. Long-term, all full-time instructors will be required by the college (not the State) to obtain this credential.

Regarding financial administration, we will retain a strong CPA to help the owner guard cash flow. While the owner is well versed in the worries of cash flow, she also has the sense to listen to reason and deal with constraints, as guided by the CPA.

Personnel Plan

The following table summarizes our personnel expenditures for the first three years, with compensation increasing from approximately $57K the first year to about $113K in the third. We believe this plan is a fair compromise between fairness and expedience, and meets the commitment of our mission statement.

The yearly figures in the second and third year are assumptions for the North Druid Hills campus only. The numbers reflect 100% enrollment, a full staff of instructors and a 5% payroll increase each year - which will include tuition reimbursement, pay increases, vacation pay, bonuses and state required certifications.

Personnel Plan

Year 1

Year 2

Year 3

Campus Director

$23,877

$25,071

$26,324

F/T Instructors

$21,760

$61,440

$64,512

P/T Instructors

$11,400

$21,600

$22,680

Total People

5

8

8

Total Payroll

$57,037

$108,111

$113,516

Financial Plan

Kitkat will finance growth mainly through cash flow. It is recognized that this means the school will have to grow gradually into the planned four campuses.

The most important factor in our case is enrollment. We must stay focused on our enrollment plan and maintain budgeted enrollment levels.

Adequate start-up capital is assumed, along with an SBA 5-year guaranteed loan.

Important Assumptions

The Kitkat financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. From the beginning, it is recognized that total enrollment is critical, which is a factor that must be influenced immediately. Interest rates, tax rates, and personnel burden are based on conservative assumptions. The most important underlying assumption is that there is a strong need for the business.

Key Financial Indicators

The following benchmark chart indicates the key financial indicators for the first three years. We foresee a gradual growth in sales (enrollment) and operating expenses into the second and third year.

It is projected that the raw gross margin will remain stable for the first three years since expenses are relatively indirect in the service based course work industry. Operating expenses increase gradually as enrollment increases.

Enrollment is very important. We must maintain an average weekly enrollment of 34 students for fixed cost coverage.

Sales Forecast

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Unit Sales

Full-time

0%

6

8

10

12

12

10

10

20

27

27

27

30

After School Care

0%

6

6

6

6

6

8

8

15

20

20

20

20

Summer Camp

0%

0

0

0

0

0

13

13

0

0

0

0

0

Part-time Workers

0%

1

1

1

1

1

1

1

1

1

1

1

1

Total Unit Sales

13

15

17

19

19

32

32

36

48

48

48

51

Unit Prices

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Full-time

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

After School Care

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

$240.00

Summer Camp

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

$460.00

Part-time Workers

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

$100.00

Sales

Full-time

$2,760

$3,680

$4,600

$5,520

$5,520

$4,600

$4,600

$9,200

$12,420

$12,420

$12,420

$13,800

After School Care

$1,440

$1,440

$1,440

$1,440

$1,440

$1,920

$1,920

$3,600

$4,800

$4,800

$4,800

$4,800

Summer Camp

$0

$0

$0

$0

$0

$5,980

$5,980

$0

$0

$0

$0

$0

Part-time Workers

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

Total Sales

$4,300

$5,220

$6,140

$7,060

$7,060

$12,600

$12,600

$12,900

$17,320

$17,320

$17,320

$18,700

Direct Unit Costs

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Full-time

2.90%

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

$13.34

After School Care

1.90%

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

$4.56

Summer Camp

3.00%

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

$13.80

Part-time Workers

0.00%

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Direct Cost of Sales

Full-time

$80

$107

$133

$160

$160

$133

$133

$267

$360

$360

$360

$400

After School Care

$27

$27

$27

$27

$27

$36

$36

$68

$91

$91

$91

$91

Summer Camp

$0

$0

$0

$0

$0

$179

$179

$0

$0

$0

$0

$0

Part-time Workers/

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Direct Cost of Sales

$107

$134

$161

$187

$187

$349

$349

$335

$451

$451

$451

$491

Personnel Plan

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Campus Director

0%

$1,833

$1,833

$1,833

$2,042

$2,042

$2,042

$2,042

$2,042

$2,042

$2,042

$2,042

$2,042

F/T Instructors

0%

$1,280

$1,280

$1,280

$1,280

$1,280

$1,280

$1,280

$2,560

$2,560

$2,560

$2,560

$2,560

P/T Instructors

0%

$600

$600

$600

$600

$600

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

Total People

3

3

3

3

3

4

4

5

5

5

5

5

Total Payroll

$3,713

$3,713

$3,713

$3,922

$3,922

$4,522

$4,522

$5,802

$5,802

$5,802

$5,802

$5,802