Environmental Analysis for a Daycare Facility - Research Proposal Example

Environmental Analysis for a Daycare Facility There are certain pre-requisites that should be addressed before the initial work on the establishment of a daycare facility as a business is done. The most principal of these based on the correct evaluation of the objective and subjective conditions surrounding and within the business organization that is setting up the facility. The objective conditions being referred to are the external environmental factors. It is clear that external conditions affect the outcome of the business, which is why these should be identified and analyzed. On the other hand, the subjective conditions are the characteristics inherent in the business organization itself. These too should be accurately defined in order to acknowledge the organization’s strengths and weaknesses, as well as potentials. In analyzing the external environmental analysis the PESTEL method will be applied. This means that political, economic, social, technological, and legal factors will be pointed out. The internal environmental factors will be studied through SWOTT, a method in which the strengths, weaknesses, opportunities, threats and trends are identified. External Environmental Analysis With all levels of government facing the need to introduce cuts in the budget, allocations for welfare and other services are in the process of being reduced. It must be noted though that this also happens to be shaped by contending perspectives on government spending from opposing political blocs. One of those that are badly affected by the political squabbles is the reduced budget meant for daycare facilities. The impending cost reduction measure is expected to result in the closure of several publicly run daycare facilities. If not, this would prompt stricter regulations for admittance. New York City provides one clear example of the said effect. According to a news report, “Mayor Bloomberg plans to eliminate 5,000 spots for after-schools programs and move an additional 10,500 similar slots for low-income children from local community programs to the Department of Youth and Community Development’s cheaper Out-of-School Time program” (Katz 2011). This is scenario that is basically taking place in many other cities in the country. Apparently, more children will be displaced, a situation that can be promptly addressed by the establishment of daycare facilities that are privately run and therefore, free from the current underlying politics of government fiscal policies. The current economic conditions have made it even more difficult even for middle-class families to allocate a particular amount of their monthly budget for child care. With incomes shrinking due to inflation, a growing number of parents have seen the need to both have a job. This naturally results in the necessity for child daycare facilities. However, the cost for sending a child to daycare has also increased significantly through the years, taking a big chunk of a family’s monthly budget. Five years ago, the National Association of Child Care Resource and Referral Agencies reported that the average annual fee for one infant ranges from $3,803 to $13,480 (Armour 2006). With recession occurring in 2008 and with the effects still felt even today, it is clear that the said range has increased several times. This only gives the idea that for a daycare facility business to work, it should present itself as a cheaper alternative to other similar private enterprise. As pointed out above, the weakened economy has prompted both parents to seek stable employment. As a consequence, children are left without parental care throughout the day while parents are out working. There is always the option of hiring babysitters but then, in most cases, the children are never given the necessary basic education by such individuals. Babysitter’s primary function is just watching over the children and preventing them from getting into accidents. A daycare facility, on the other hand, does not just oversee the kids but also provide basic training according to the age of the child. In this respect, a daycare facility plays a very important role in a society that is pushing parents to work full-time in order for their families to live decently and to create better opportunities for the children. The social conditions are indeed favorable for the establishment of a daycare facility as a private business. Technological advancements have also given impetus to the necessity of training children early on about their use and relevance to people. Unless children are taught that technology is mainly for improving mankind in the comprehensive sense, they may get the impression that these are just all for leisure and play. Nevertheless, the aim of introducing it to daycare’s children is to facilitate both learning and play. Daycare facilities who do not creatively apply modern technology in its operations are definitely out of step with the times. Currently, the trend is to have daycare facilities that are equipped well with computers, audio-visual systems, security and child-safety systems, and other electronic devices used for instructional and recreational activities. Such trend has greatly contributed to the basic technological education for children. Any new daycare facility business should, therefore, take this into consideration. Before a private daycare business could be established, it is necessary to first learn about the legal aspects that affect it. Apparently, there are laws in each state that govern the establishment and the operation of such enterprise. A license is required for the operation for a daycare facility. The rules and requirements regarding this may vary from state to state although the key points are basically the same. Every state and locality may also have its respective licensing agencies. Payment of licensing fees is compulsory and the amount depends on the size of the facility or on the number of children that could be accommodated in the facility. The fee is collected right when the application process for a license is initiated. If the government agency in charge of regulating private daycare facilities denies the application, the said fee will be refunded. The New Jersey statutes on the matter, for example, explicitly state that “if the application is denied, or the center does not open, the Bureau will refund the licensing fee to the applicant” (NJ Department of Children and Family). However, if the application is approved and a license is provided, no refund would be provided. With the external environmental factors already considered, the internal conditions should be discussed next using SWOTT. The strengths to be pointed out are those that the business organization already has before the daycare facility is started. The assets are categorized into human, technical, and financial aspects. The strengths should therefore be found in the daycare facility’s valuable service and programs, which cover the stability of program, funding, and staff, as well as the administrator’s open attitude towards change (Ratekin & Bess 2003, p. 30). A staff with adequate experience in running a daycare facility is necessary. To gain the trust of the community, the director is someone who is well-respected. Running the facility and taking care of the children definitely requires a higher level of teamwork involved. A strength that the organization has in relation to this is the staff’s camaraderie and ability to cooperate with each other because of the values that they uphold in common. However, there are also some weaknesses that the organization has to overcome by seeking practical and effective solutions. One of this is the number of personnel that the facility must have. The aim is to provide excellent child care by having more staff members, especially since “review of all the major research in child care clearly demonstrates the importance of maintaining the appropriate staff child ratios and group sizes” (Fiene 2001). However, due to financial constraints, the organization may not be able to achieve the ideal ratio of staff member per child. If the organization gives utmost importance to the quality of the program, then it may also have to compromise the business aspect of the operation, which is to generate profits. Another apparent weakness that must be addressed is that of an ideal location. The facility’s goal is to serve middle-class parents who can leave their children in a daycare center just near their workplaces. However, looking for a site that complies with this can be very difficult. Despite the weaknesses though, the opportunities for succeeding in the daycare business are very favorable. Aside from the possibility of generating income for both the staff members and the administration, the operation of the facility clearly benefits the community as well. Once the operation of the business begins, it is expected that there will be a gradual increase in the number of parents who would be interested in enrolling their children in the daycare facility not only because of its location and amenities but because of the training that the personnel provides. Investments for the business would not be necessarily high, especially because the state or local governments may have laws that allow them to provide subsidies to such programs. However, it is important also to take note of the threats that the daycare business may face so that it could prepare itself against these or set up mechanisms that could resolve these early on. One such obvious threat is the possibility of the parents not being able to pay tuition due to declining incomes. There is also the threat of competition from daycare centers that are not legitimate. Staff members could become too stressed out to the point that they become less effective in performing their duties. Even when the business operation has just started, it is would be prudent to immediately consider solutions for such threats. Although the threats and the weaknesses should not be ignored, it is important to consider also the trend in which more business entities have entertained the idea of setting up a daycare facility. A number of these have in fact gone ahead to build such facilities in their respective areas. Despite the growth in the number of establishments though, there are still more parents interested in enrolling their children in such facility. Conclusion It is clear that the external environmental factors are favorable for the establishment and operation of private daycare facility. The most compelling of these said factors are that; the economy has pushed more parents to work full-time, creating the necessity of daycare facilities for their kids, the government has been forced to reduce spending for welfare and child care, giving the opportunity of private businesses to take over the role of operating child care facilities, technological inputs have been developed which could be utilized to make daycare operations easier, and laws have been created to support the establishment of such private facilities. All these external conditions, definitely confirms the viability of establishing private daycare business. However, even as such external environmental factors are favorable to the establishment of a privately-run daycare business, it is still necessary to consider the internal conditions too. It is true between the external and the internal conditions, the latter are more decisive. Thus, it is necessary to reiterate the findings provided by the SWOTT analysis. The most outstanding strength as pointed out is that the organization itself is made of able and experienced professionals in the field of child care. From the director to the staff members, the potential high quality of the performance has been determined through an efficient recruitment system. In the effort to build up a very competent staff though, the organization may decide to hire not too many individuals and this may render a bigger discrepancy to the care provider-child ratio. To treat this, the daycare business organization has no other choice but to limit enrollment unless it gains the capability to increase its size in terms of staffing and facility. However, there are also some negative factors that the organization must treat effectively. These can be overcome though through maximizing the internal strengths already found in the organization itself while weaknesses are corrected or overcome. As has been explained, the opportunities and strengths far outweigh the weaknesses and threats. The trends, on the other hand, only supports further the idea that operating a daycare facility can be a lucrative business. References Armour, S. (2006). High Costs of Child Care can Lead to Lifestyle Changes, Adjustments. USA Today, 18 April 2006. Retrieved 17 July 2006 from . Fiene, R. (2001). Key Indicator Research Brief. National Resource Center for Health and Safety in Child Care. Retrieved 11 July 2011 from . Katz, C. (2011). City Council Members Trash Daycare Closure Plans. NY Daily News, 19 May 2011. Retrieved 16 July 2011 from . New Jersey Department of Children and Families. (2009). Manual of Requirements for Child Care Centers. Chapter 122. Trenton, NJ: Office of Licensing. Ratekin, C. and Bess, G. (2003). Preparing to Evaluate Your Child Care Center Performance. Child Care Information Exchange. Redmond, WA: CCIN. Read More