The Child Care Academy Cca

Published Date: 02 Nov 2017

Child Care Academy (CCA),

Near IIT Bombay,

Bombay-400097.

India.

Tel:- +91-9892177468

e-mail:- [email protected]

Contents

21

EXECUTIVE SUMMARY

Business Overview

The Child Care Academy (CCA) is founded and owned by Mr.Eshant Badge and Mr.Pratik Raul, two postgraduates in child health and nutrition. It provides series of programmes for 50 children of all ages from toddlers (3yrs-5yrs) up to the age of 10years. The CCA will be targeting primarily the families with double income professional parents and the Phd or research national and international students as secondary targets. We offer several classes for the children with respect to their age i.e. from basic play and care for toddlers to specialized and innovative teaching and co-curricular activities for those above 5years such as memory games, puzzles, elocution competitions, stage plays, physical training and exercise and many more.

To be on top of the competition, we also offer special training programmes for parents on proper nourishment of their kids and a nurturing environment for parents and children to spend time together and play.

In Bombay the rents are sky high to begin with and with an increase in inflation of approximately 2% every year, soon both of the parents in every family would have to work. Taking this along with the emotional factors and traditional beliefs of the Indian families into consideration, the business is expected to grow with a gradual pace for the initial years.

The company expects to have reasonably good sales in the starting year and by the end of the third we expect to have more than 50% increases in sales as compared to the first year. After the initial investment and launch of the academy, we expect first year to be lean. In the second year, with the help of a loan there would be establishment of a well-furnished office, a call centre and a training space. In the third year the business will expand by its own financing. If the business is proved profitable we may expand to more cities.

MISSION

The Child Care Academy aims at providing top level of caring and nourishing environment for the children so that their parents can go for their respective jobs without worrying for their kids. The academy is determined to play an important role in developing the future of society and promoting cultural diversity.

OBJECTIVES

The objectives meant for CCA’s success are:

To be recognised as the best, affordable and a modern child caring service that Bombay has to offer.

To maintain a steady growing net profit margin and increase customers exponentially.

To maintain a high gross profit margin.

MARKET SIZE

According to the recent survey of working population by Bombay community Council, the total working population of Bombay is 2500000 out of which 1400000 are couples. As per another survey conducted by Bombay Education Council, there are 50000 masters and Phd students (irrespective of their nationality) in Bombay and among those 10000 are married with kids. This shows the huge market for the business. Therefore there is a need to establish a child care academy for the double income professional parents and the Phd or research student’s supporting the country’s economy and our company aims to achieve the same by taking care of their children when they are at work.

Growth potential

Due to huge market size, we believe there will be a good potential for our company to grow. Since it is one of its kinds in Bombay which has high population of double income professional parents and the Phd or research student’s we hope there would be good public response. Depending on the profit gain we first plan to expand our services to other big cities such as Pune and Nagpur and then expand our business even further and make it national.

Service/Product

The services offered by CCA will include play and fun zone for the children of all ages and other services based on their age and the duration for which they are in, which includes:

Nursery and primary schooling.

Food and drinks.

Basic physical exercises and other extracurricular activities.

And there will be other additional service on request by the customers. These services include:

pick up and drop in for children from their respective homes.

Parenting classes for the parents usually on weekends.

Industry

Although there are many child caring centres available but there are only a very few who gives special attention towards the overall development of a child. In Bombay, there is no service which specially pays attention to the overall development of a child in addition to educating parents towards proper parenting. The fact that there are few companies is alarming since the gap between the children and parents is increasing due to the fact that parents don’t have much time for their kids. Over the years this has increase a lot which results in less understanding between the child and parent and results in fights. Thus keeping this in mind we decided to launch this academy that provide service exclusively to parents towards better parenting and tries to reduce the gap between child and parent by giving them a fun loving atmosphere to spend time.

Competition

To begin with there exists no big competition for our service because we believe that our service is unique. Though there are other companies in Bombay but none of them offer similar overall services. These companies offers services such as caring and playing or nursery, but none of them offers an all round services i.e. no other company ensures the caring and nourishing environment for the children along with specialized and innovative teaching and co-curricular activities. The geographic location of the CCA would also give it an edge over other companies as this will help to attract more public, both professional and student. Therefore we have a competitive edge over companies.

We also believe that there will be competition in the future due to setup of other similar companies. But we will be able to overcome such competition due to our loyal customers that we have been made cause of our efficient services who would think twice before availing the services of our competitors. Not only this, we will upgrade ourselves keeping in minded the need of the customers.

Management

Our company would be having 2 managing directors who are also the founders of the company. The rest would be employees. To begin with, there would be a total of 17 staff which includes 4 nurses, 2 cleaners, 2 receptionists and 9 experienced teachers. In the first year, taxi drivers for the to and fro transportation of child and parents would be hired on part time basis and commission would be given to them so that they can do their own work along with ours.

Keys to Success

CCA include the following keys for running a successful business:

Modern specialized and innovative teaching and co-curricular activities

Well trained teaching and non-teaching staff to handle any unpleasant situation

Provision of transport service to and fro for the children.

Special parenting classes makes it unique without any direct competitors

The affordable price would add to its benefits and ensure the availability of kids from even middle class families.

Legal Operations

The license and permission for opening and running of the academy would be taken from the Government by paying the required license fee prior to the start.

Funding Requirements

Initially each managing director would invest INR15Lakh respectively. Then a sum of INR 500000 would be borrowed from a business angel. These funds would be utilized in the renting the office and academy space and doing furnishing, buying toys and educational games, stationeries for our office. Some part would be spent on recruiting employees, promoting and advertising our business. At the end of the first year we plan to take a loan of INR 10Lakhs which would help us in setting a new office base and in the recruitment of more employees.

MARKETING STRATEGY

Market size and Market targets

According to the recent survey of working population by Bombay community Council, the total working population of Bombay is 2500000 out of which 1400000 are couples. Survey shows that 20% of the couples have kids of the age under 10 years and 50% of this is those in which both of the parents are earning. Now talking about the children in whom we are interested, the survey shows that there are a total of 280000 children and 140000 children having both parents working. There are 50 smaller and 20 bigger care centres with a total of 70000 children and other 10000 are those who are having personalised care i.e. the care taker come to their own home and the remaining have either of the grandparents to take care of. So, at first we will be targeting the population of these 80000 children who goes to these smaller and bigger child care centres.

There are 50000 masters and Phd students (irrespective of their nationality) in Bombay and among those 10000 are married with a total of 10000 children.

In initial stages of our business we target large section of population who are going to other small and big child care centres. We target couples, employs of MNC, doctors, lawyers, etc, who have reasonable good income for living on one side and students on other side. It can be easily inferred from the statistically data of last four to five year that there is rise in number of people who are sending their children to these child care centres.

The main attraction of our service would be to ensures the caring and nourishing environment for the children along with specialized and innovative teaching and co-curricular activities. It also guarantees the safety of children in the experienced hands of our staff.

Barriers to Market

We expect many barriers to enter the market with our company, some of which are:

High capital costs

High marketing costs

Consumer acceptance and brand recognition

Training and skills

We plan to overcome the barrier of high capital cost, marketing cost, tariff barriers and quotas by borrowing funds from a business angel and banks. With our efficient, sincere and honest service we are confident of winning the hearts of our customers.

Growth potential

Depending on the profit gain we plan to expand our services to nearby areas such as Pune, Nagpur and in other states as well. We plan to setup offices in these places and depending on the profits, our next plan of action would be to expand our business further and make it national. We also plan to introduce new services such as swimming pools and massage parlour for parents so even they can relax with their children. We also think of including more nurses and on board child Doctors in case of any emergency. Providing to and fro transportation facilities for all the children from any location will also be provided.

Pricing policy

The pricing strategy for licensing and other permits would be INR 150000. The cost of membership for our service would be INR 6310 per month for an individual. And for students we will be offering discount of 10%. This cost is charged based on the comparison with all other care centres.

It should be noted that these types of facilities are not provided by ordinary care centres and therefore we believe that our customers would be happy to pay more for quality services.

Promotions

To reach the set targets our company will use many tactics for promotion and advertisement such as:

Advertising in media agencies such as television and newspaper.

Advertising online adds on sites such as Google.

Distribution of Business cards and Brochures outside universities and pamplets via newspaper.

Developing website containing the information about our services and our contact details.

Mailing brochures and letters directly to corporate companies.

SWOT Analysis

Strength:

Unique and one of its kind.

Nurturing environment.

Enjoyment and teaching beneath one roof.

Unique parenting classes for parents.

Opportunity for both parents and children to spent time together.

Weakness:

Reaction of people towards company is not known.

Risk of running low on costumers.

Competition from other established care centres.

Opportunity:

Well defined market niche.

Covering a greater market range as consequences of competition.

Threats:

Accidents

We will strive hard to convert our weakness into strengths. A large customer base could be achieved by providing an efficient service and also by better advertising strategies. The threat of accidents can be improved by introducing CCTV recording in all the areas.

PERSONNEL PLAN AND HUMAN RESOURCES PLAN

The personnel plan aids in planning the full-time and part time office personnel of the business. More part-time employees would be hired as sales increase. Our part time employees would be drivers and will be hired either as daytime drivers, night-shift drivers, and part-time drivers. One physical and personal relationship trainer would also be hired on a contract basis. Company will also have initially a male and female receptionist who would be working full time. 1-3 male or female University students would be hired who would distribute our pamphlets and brochures to various universities in Bombay along with working on part time basis in the office as receptionist. The owners would themselves visit corporate companies and make presentation in order to attract more people. There also would be a lawyer who would be hired on a part time basis to deal with legal obligations

After an independent background check and interviews with both the founders, all the staff will be hired. All of the staff would be eligible for health insurance and disability pay through the business to protect them in the case of injury during jobs or other problem.

Personnel Plan

Year 1

Year 2

Year 3

Eshant Badge

INR36,000

INR36,000

INR36,000

Pratik Raul

INR36,000

INR36,000

INR36,000

Nurses/Receptionists/Advertisements/Taxi drivers/Lawyer

INR510000

INR605000

INR737000

Total People

25

35

45

Total Payroll

INR582000

INR677000

INR809000

ACTION PLAN

The site for the main office including the area for the academy would be set up in the non-residential complexes. A total 0f 2000 sq.ft of area would be selected and designed accordingly for the play zone, teaching area, first aid room, office and reception. The budget for the building area would come from the bank loan. The budgets for creating the website, brochures, pamphlets will come from the initial assets possessed by the founders. This process would take 2 to 3 months. The office would be set up in 2 months and the process of setting up the office and advertising will be done in parallel. The detail of the initial split up for the first six months is given in the GANTT chart below. ESHANT BADGE will manage all the marketing and sales activities while PRATIK RAUL will set up accounting system and interview potential drivers.

Therefore from the chart it can be inferred that we will have all the sufficient funds and accessories by the end of August and by the month of September we would be ready to launch our company.

Start Up Expenses

Even before starting our business we will have expenses which we describe as start up expenses. Based on the current market cost and the advice from the friend who is conducting the similar business elsewhere, we have planned these expenses more or less accurately to achieve sufficient capital and have reached an estimate of setting up the office, renovation, furniture, stationery

Our estimate would be about INR 100000 which would include flooring, painting, wall draping, carpets, lightings and fans. We also plan to have a play zone with all games, fire alarm, water heater, centralized heating/cooling, telephones, coffee machines and desktop computers which would come up to INR 90000. A sum of around INR 30000 would be allocated for office furniture such as chairs, tables and would include also stationeries and crockery. Additionally we would require INR 6000 for designing our website and INR 6000 for printing pamphlets, brochures and business cards.

There would equal contribution of INR 15 Lakh from each founder and therefore both founders would enjoy an equal percentage of 50% ownership in the company. We also plan to borrow INR 500000 from a business angel.

FINANCIAL PLAN

Our company expects to have profit from the 8th month of starting the business. After one year we will apply for loan of INR 10 Lakh which would help in meeting the expenses for the following 2 years. This loan would help us in buying more games and recruiting more personnel. Depending on the profits achieved we plan to expand our business in major cities such as Pune, Nagpur etc. Hopefully by the end of the third year we will have our branches in at least these 2 cites apart from Bombay.

Start Funding

Important Assumptions

We assume that our company will have an upswing in the next three years. Since there is competition in the market we would be highly successful in getting customers from the mid of first year of opening. Moreover we assume that the customers will be highly satisfied with our service. We assume the following yearly gross sales for our company.

At the start of the business both founders will contribute INR 1500000 each and the remaining amount for the start up will be provided by the business angel.

STARTUP EXPENSES

INR3500000

START UP ASSESTS

INR3500000

TOTAL FUNDING REQUIRED

INR7000000

Total Investment

INVESTMENT BY ESHANT BADGE

INR1500000

INVESTMENT BY PRATIK RAUL

INR1500000

INVESTMENT BY BUSINESS ANGEL/ BANK

INR1000000

BREAKEVEN ANALYSIS

Breakeven analysis of this business is INR 240000. Total running cost of this business is INR 240000 per month including rent, salary, telephone bills and other miscellaneous charges and therefore the total sale of INR 240000 is required for the condition where there is neither net profit nor net loss.

PROJECTED PROFIT AND LOSS

Major expenses for the first year would be for accessing the area for main building and office along with recruiting staff for different positions. Only experienced staff for teaching and nursing and driving would be allocated. Marketing will be including web hosting services, maintenance fees, and revisions and reprinting of brochures and pamphlets, additional direct mail campaigns, online advertising and advertising in television and radio.

Rent, utility bills, and depreciation will be the expenses at the beginning of second year. Training cost reduces as we will be having experienced staff to teach the new staff. From the second year training would occur in the conference room of the office. Training will be an ongoing expense but at much lower rates due to turn-over and due to continued training of the employees and check-ins of new recruits, as the traning will be provided by the hired staff with additional pay for each session.

In the second year we will apply for loan and will appoint more employees. We also plan to outsource call centre in the second year to SPARSH BPO and this would add up to the expenses. 3 more service automobiles would also be purchased. Thus in the second year, net profit will go down to a net loss because of additional expenses such as outsourcing of the call centre, buying vehicles, hiring more employees etc. From the third year our business will slowly scale up and cover the additional costs. Therefore we expect to have a net profit in the third year.

SALES IN YEAR

YEAR 1

YEAR 2

YEAR 3

Sale

INR850000

INR1010000

INR1298000

Teaching/nursing staff

INR240000

INR300000

INR384000

Drivers and other Staff

INR200000

INR228000

INR270000

Call Centre

INR0

INR96000

INR96000

Gross margin

INR360000

INR336000

INR498000

Percent

45%

35%

39.9%

EXPENSES FROM GROSS MARGIN

YEAR 1(in INR)

YEAR 2(in INR)

YEAR 3(in INR)

Building/Cars

500000

500000

500000

Bank

0

675000

675000

Payroll

700000

770000

630000

Promotion

300000

330000

350000

Rent

0

360000

360000

Insurance

50000

60000

70000

Bond

20000

25000

28000

Fixtures

0

250000

1000

Payroll Tax

750000

800000

820000

Training

80000

100000

120000

Licence and Permits

150000

170000

180000

Employee Benefit/Bills

700000

230000

250000

Total Operation

2750000

4370000

4280000

Net Profit

850000

-1010000 (expected loss)

700000

30% Tax on income

255000

0

210000

Remaining Profit after giving Tax

595000

0

490000

CASH FLOW

The excess cash remained from the first year of operation and INR 10 Lakh loan taken by both of the owners at 10.5% interest, from the bank will be used in expanding our workspace to a bigger space in the second year. This would also require the purchase of additional games, furniture, computers, telephones etc. Some money will also be used for renovation if necessary.

Cash flow is expected to be positive from the sixth month due to low fixed cost, and there would be no full time call centre. Furthermore in the first year there is no need for paying rent for training of the staff as only experienced staff would be hired. Also there will be less investment in furniture and other accessories.

In the second year the company plans to expand the office and main building space and recruit more employees. More money would also be spent on furniture, phone and other equipments. The company also plans to outsource call centre which will also involves a lot of investment.

It would be estimated that sale would be on direct membership of INR 6031(inclusive of all taxes) for the whole year.

SALES FORECAST

After determining our market potential we plan our sales forecast. Our sales forecast will be dependent on advertising and promotion, production and distribution efforts.

Our market research has shown that our market size is very large. Initially we will invest INR700000. We plan to advertise our business through the internet, distribution of pamphlets, brochures and making presentations. Our business plan is value based. The following table and chart represents our monthly sales forecast.

APPENDICES:

Balancesheet

ASSETS LIABILITY AND OWNER EQUITY

Cash in hand: INR 3000000 Account Payable : INR500000

Cash in Bank: INR 1000000 Payroll Expense : INR2400000 Payments received: INR 200000 Angel Loan : INR400000

_________________

Total : INR600000 Total Liability and Owner Equity : INR33000000

Fixed Assets

Cars/Staffs : INR300000

Office Workspace: INR3000000

_________________

Total : INR3300000

Other Assets

Licence : INR150000

Total Assets is INR4050000