Business Plan for Childrens Nursery - Assignment Example

Business plan Table of contents 1 EXECUTIVE SUMMARY 3 1.1 Business Concept 3 1.2 Current situation 3 1.3 Key success factors 4 1.4 Financial situation/needs 4 1.5 Vision statement 4 2 MARKET ANALYSIS 4 2.1 The overall market 5 2.2 Market segments 6 2.3 Target market and customers 6 2.4 Customer needs 6 2.5 Customer buying decisions 7 3 COMPETITIVE ANALYSIS 7 3.1 Industry overview 7 3.2 Nature of competition 8 3.3 Opportunities 8 3.4 Threats and risks 8 4 STRATEGY 9 4.1 Key competitive capabilities 9 4.2 Key competitive weaknesses 9 5 PRODUCTS/SERVICES 9 5.1 Product/service description 9 5.2 Positioning of products/services 10 6 MARKETING AND SALES 10 6.1 Sales tactics 10 6.2 Advertising 10 7 OPERATIONS 11 7.1 Key personnel 11 7.2 Organizational structure 11 8 CREATING THE FINANCIALS OF THE BUSINESS PLAN 11 8.1 Sources of start-up finance 11 8.3 Starting Balance Sheet 13 References 16 BUSINESS PLAN 1 EXECUTIVE SUMMARY 1.1 Business Concept The proposed MUMU EXPLORERS CLUB will be a children’s nursery and will be taking care of school going children before school starts (7 a.m.-9 a.m.) and after school (3 p.m-6 p.m.). In addition to that, the nursery will be taking care of part time children attending school nursery from (12 p.m.-3 p.m. /6 p.m.). This business venture is ideal because most of the nurseries in the area only offer services to full time children. In addition to that, there are few nurseries in the area and which are expensive to most of the parents. From survey and research, the present nurseries are not convenient to studying and working parents because they charge the same amount for both full time and part time children. Apart from day care, Mumu club will also be offering drop off to school and pick up from home. 1.2 Current situation The current nurseries offer their services to at a constant price of £65 per child per day. This amount is not affordable for most parents and is disadvantageous to part time parents who are either studying or working. In addition to this, the current nurseries do not offer drop off and pick up of children to school and from home. This makes it hard for part time parents as they have to go to the nursery to pick their children. Apart from that, the current nurseries do not offer meals, tea, and snacks to the children. This makes it difficult for the children stay strong and play as they wait for their parents. 1.3 Key success factors One of the success factors of the club include the presence of unutilized church that can be used for the project. Getting a spacious place for the project will give the club the opportunity to expand their project and give additional services to the children as they wait for their parents. Another success factor is the presence of many parents who are either working or are studying. This gives a great opportunity to set up the club and take care of their children when they are away. 1.4 Financial situation/needs Mumu explorers club will need a good amount of finances in order to start operating. The first and most important asset is a room and space for carrying out all business activities. In this case, Mumu explorers club will rent the old church next to the school which will cost £3000 per year. The club will also need £300 for the three planned outings per year, £500 for food per week, and £7.00 per staff per hour. 1.5 Vision statement To be the leading nursery in the region with the best and cheapest service. 2 MARKET ANALYSIS In order to carry out the best market analysis, quantitative data was used. In this case, the researcher had to go into the field and interview parents on their view about the current situation and service as delivered by the school nurseries. A total of 100 parents were interviewed and their outcome is tabulated below. A total of 95 parents said the idea was good and were willing to relocate their children from the various school nurseries to Mumu explorers club as soon as the club was operational. 2.1 The overall market The market is mainly made up of working parents, studying parents and those who are available for their children on a full time basis. The three types of parents will requires different services according to their convenience and budget. Although the club will mainly target the part time parents who are either working or studying, the club will be free and open to any other parent who will need the available services. From the research, 95% of the parents were supporting the idea and willing to relocate their children to Mumu explorers club. This is shown in the graph below. 2.2 Market segments In this area, the market is segmented into two sections, full time and part time children. In this case, the club will mainly be targeting part time children attending school nursery and who belong to parents who are either working or studying. This will give the club a higher competitive advantage and will enable it to get more customers during start up. 2.3 Target market and customers Mumu explorers club will mainly target the part time parents: that is, those studying or those working. The club targets to take care of children in the morning before school sessions start (7am-9am) and in the evenings after school sessions close (3pm-6pm). In addition to that, the club targets to take care of part time children attending school nursery (12pm-3pm/6pm). 2.4 Customer needs Results obtained from the market research and analysis indicate that most customers need cheap and flexible services. This is mainly because the current nurseries do not offer services for part time children. In addition to that, the pricing system of the current nurseries is unfavorable for most of the parents and thus require a flexible and convenient payment system. According to most parents, paying a constant rate of £55-65 per day per child is expensive and not convenient for the part time children. They therefore need a flexible pricing system and better service delivery. 2.5 Customer buying decisions After conducting comprehensive market research, it was evident that parents opt for cheaper prices, better services and flexible schedules. This gave Mumu explorers club a good clue on how to strategize on their services and prices so that they can attract many customers within a short time. From market analysis, it is expected that the club will get more customers every month and will grow exponentially. 3 COMPETITIVE ANALYSIS 3.1 Industry overview The nursery school system has been in use for quite some time and helps parents a lot in taking care of their children when they are not available to take care of them. In the area, there are a number of nurseries but which only offer full time day care for children. They offer their services at a constant fee of £65 per child per day regardless of the number of hours a child spends at the nursery. This rate of payment is seen to be unfavorable to most parents and especially part time parents who are either working or studying. In addition to that, the current nurseries do not offer pick-up and drop off of children from their homes and to school. 3.2 Nature of competition Thought the current nurseries offer stiff competition on the number of available children, there is a lot of room for development and capturing a bigger market segment. The main advantage the current nurseries have is their branding and business experience. This however, is not a big threat to the club because there are many activities put in place to counter their actions and attract more children each day. One of the main advantages the club has is offering cheap services. In addition to that, the club will also be offering pick up and drop off of children at the same price. This will attract many parents to the club thus gaining a bigger market segment. The club will also be offering meals and related services at the same amount of £5 per child per hour. This will attract more parents and children to the club thus gaining more customers. 3.3 Opportunities From market research and analysis, there are many opportunities in this business sector. One of the opportunities is the presence of many parents who are either studying or working. This offers a great opportunity for this business venture to prosper and expand at a very high rate. Another opportunity for the business is the absence of a flexible and convenient pricing system in the market. Implementation of club’s payment system of £5 per hour per child will be very convenient and flexible to most parents. 3.4 Threats and risks One of the major threats to this business is the presence of already established school nurseries. In order to deal with this, the club will need to put in place more advertising strategies and additional after sale services like drop off and pick up of children. In addition to that, another threat that might come up is changing of the payment rates of the other school nurseries. This will make parents to retain their usual nurseries due to convenience. 4 STRATEGY 4.1 Key competitive capabilities The main advantage Mumu explorers club has is the presence of meals and drop off of children at the same price. This will attract many parents because it offers more flexibility to their schedules and work. Another competitive advantage for the club is the presence of the premises close to the school. This will give it a better proximity to parents and children thus a bigger market segment. The presence of a bus that will be offering pick up and drop off of children also gives the business a higher competitive advantage. 4.2 Key competitive weaknesses The main weaknesses that might come up during the business implementation is the absence of proper advertising. Advertising is a core business tool and helps in sensitizing the market on the available products and services. 5 PRODUCTS/SERVICES 5.1 Product/service description The main services offered at the club will include children’s day care, pick up from home and drop off to school, tea and snacks, and meals. All these services and products will be offered at the same rate of £5 per child per hour. Children will also be given playing equipment and space so that they can play as they await their parents. 5.2 Positioning of products/services Mumu explorers club will be located in the old church, which is only 15 minutes’ walk from the school. This location is very convenient to both parents and children as parents have already agreed that a 15 minutes’ walk from school is favorable and convenient for them. 6 MARKETING AND SALES 6.1 Sales tactics The main sales tactics that will be used include, offering low prices that are convenient for every parent, offering additional services like pick up and drop off of children at the same price, and offering meals and tea to children at the same time. 6.2 Advertising The main form of advertisement that will be used is through word of mount. After start up, all children and parents getting services from the club will be sensitized to inform their friends and family. Through this, the business will be able to get additional students without incurring advertising costs. This method is also very convenient because the project is local thus will only need local students who are easy to reach. 7 OPERATIONS 7.1 Key personnel Mumu explorers club will be managed by two major administrators. The administrators will be responsible for planning, organizing, and supervising all the activities of the club. The administrators will be delegating duty to ten of their juniors who will be taking care of the children. In addition to that, the club will have drivers and cooks for the additional services offered at the club. 7.2 Organizational structure The organization will have two administrators who will be heading the club. In addition to that, it will have ten facilitators who will be ensuring that children are taken good care of. They will be responsible for organizing games for children, feeding them, ensuring they have signed in in the morning and ensuring that they are safely handed over to their parents in the evening. This will help to ensure that there are few flaws and misunderstandings between the club and the parents. 8 CREATING THE FINANCIALS OF THE BUSINESS PLAN 8.1 Sources of start-up finance The main sources of startup finance will be Westminster bank and Natwest bank. They agreed to give loans of up to (£25-£35k) each for the startup. In addition to that, personal investments and funds will be used to run the business. Table 1: Showing profit and loss statement Mumu Explorers Club Profit and Loss Statement March 2015 Operating Revenue Product sales Service sales £ 38000 £ 12000 Total Operating Revenue £ 50000 Operating expenses Cost of goods sold £ 14000 Gross profit £ 36000 Overhead Telephone & internet Water &electricity Property rent Insurance Advertising costs Vehicle/school bus Running costs for school bus fuel Stationery Bank charges Depreciation Furniture & fixtures Equipment (Disabled children) Debtors Creditors Total overhead £ 200 £ 400 £ 250 £ 300 £ 20 £ 20000 £ 500 £ 200 £ 500 £ 100 £ 200 £ 200 £ 250 £ 23120 Operating income £ 12880 Other income Loan interest Earnings before income taxes Income taxes £ (100) £ 12780 £ 2268 Net earnings £ 10512 8.3 Starting Balance Sheet MUMU CO. BALANCE SHEET AS OF MARCH 2015 Assets Current assets Accumulated funds -£70,000 Total current assets -£70,000 Liabilities Bank loan1 £35, 000 Bank loan2 £35, 000 Total liabilities £70,000 Business Balance Sheet: Assets = Liabilities + Owner's Equity Table 2: Showing Gross and Net profit margin (Yearly) Business Ratio 2015 2016 2017 Gross Margin yearly £33520 £34526 £36000 Profit yearly for the business £8965 £9485 £10512 Graph showing gross margin yearly Graph showing net profit yearly Table 3: Showing Gross margin monthly Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals 2015 £3000 £2500 £2200 £2300 £2533 £2536 £3521 £2485 £2365 £2755 £2156 £5169 £33520 2016 £2512 £2562 £2563 £3569 £3458 £3695 £3569 £2125 £2895 £2245 £2912 £2421 £34526 2017 £2953 £2456 £3154 £3151 £3365 £3389 £3478 £2100 £2056 £2059 £3569 £4270 £36000 Table 4: Showing Profit monthly Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals 2015 £780 £740 £741 £785 £700 £701 £705 £762 £732 £745 £785 £789 £8965 2016 £715 £784 £785 £745 £762 £718 £702 £836 £832 £815 £812 £979 £9485 2017 £782 £785 £945 £915 £902 £905 £906 £905 £885 £848 £895 £839 £10512 References Harvard Business School, 2007. 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Anatomy of a business plan: a step-by-step guide to building the business and securing your company's future.. Tustin: Out of Your Mind & into the Marketplace. Tiffany, P., Peterson, S. & Barrow, C., 2012. Business plans for dummies. Hoboken: John Wiley & Sons. Read More