capstone - team c - powerpoint - final to grade
TRANSCRIPT
Ladybug Daycare Center
Ladybug Daycare Center
Team C - Business Plan
Keller Graduate School of Management
Combined Capstone ProjectProfessor Anthony Shotwell
August 25, 2015
Agenda and IntroductionsBusiness Concept
John Dawson, President and VP of Finance
Marketing PlanSenda Brahmi, VP of Marketing
Operations PlanBernard Isiko, VP of Operations
Human Resources PlanMitra Khiabanian, VP of Human Resources
Information Technology PlanVic Melkonian, VP of Information Technology
Financial PlanJohn Dawson, President and VP of Finance
John
The Executive Team
John
Business ConceptJohn Dawson, President and VP of Finance
John
Business Concept Mission Statement: Provide Modern Daycare Services for
Children Aged Two to Five Years.◦ Academic Services◦ Technology-Based Learning◦ Language and Art Lessons◦ Organic Food Services◦ Provide Child Care to Local Businesses
Vision Statement: Ideas inspired by mothers looking for better child care solutions.
Investment return of initial principal plus a 9% rate of return exit strategy for investors.
John
Business Concept More than just a daycare center
◦ A business augmented with technology sales possibilities Mobile App and Web Application High Revenue and Expanding Business Model
◦ Franchise Potential◦ Increased Corporate Sponsorship
Global Sales Potential Latest Technology Innovations
◦ Audio and Visual Monitoring of Children
John
Industry Overview
Source: http://www.census.gov/how/infographics/sources.html John
Industry Overview
Description 2006 Jobs
2016 Jobs
2006-16 (New Jobs)
2006-16 % change
Activities related to real estate 94,557 140,249 45,691 48%
Motion picture and video industries 151,848 184,626 32,778 22%
Employment services 152,230 183,639 31,409 21%
Colleges, universities, and professional schools 70,600 99,920 29,319 42%
Offices of real estate agents and brokers 84,767 109,598 24,831 29%
Child day care services 68,739 93,144 24,405 36%
Source: Insight Center for Community Economic Development. EMSI 6/07
Top 6 Fastest Growing Industries in Los Angeles County
John
Industry Analysis
Age Group Child's Home
Family Home
Group Home Center Total
Infants (0 to <1 yr) 4% 22% 7% 67% 100%
Toddlers (1 yr to <3 yrs) 3% 19% 7% 72% 100%
Preschool (3 yrs to <6 yrs) 3% 16% 6% 76% 100%
School Age (6 yrs to <13 yrs) 6% 24% 6% 64% 100%
13 years and older 12% 45% 7% 35% 100%
All Ages 4% 20% 6% 70% 100%
Source: U.S. Dept. of Health and Human Services. ACF-801 data for FY 2013
Average Monthly Percentages of Children in Child Care by Age Category and Care Type
John
Industry Trends
Source: Average net profit margin for child day care businesses in Sageworks’ database John
Survey Results (Sample)
John
Survey Demographic: Random to West L.A. parents Sample Size: 1000 Response Size: 70
Senda
Marketing PlanSenda Brahmi, VP of Marketing
Target Market Marketing Communication
Plan Marketing Mix Strategy Competitive Advantages SWAT Analysis
To watch, hear and be worry free place your child in our company!
Senda
Target Market
Sendahttp://www.weho.org/home/showdocument?id=13481
http://www.weho.org/home/showdocument?id=13188 Senda
Target Market
Marketing Communication Plan
1000 flyers 1000 business cards Child Care Resource Referral Marketing items Ladybug mascot Christmas event Social media Advertising in Los Angeles Times Grand Opening event
Senda
Marketing Mix Strategy
Senda
PLACEWest
Hollywood/ Internet
PROMOTION
Social Media, Flyers, LA
Times
PRICE $1,250
Monthly
PRODUCTDaycare Center &
Mobile App
Senda
Competition
Hollywood Little Red School
Doheny School
Competitive Advantages
Senda
Ladybug Daycare Center
Doheny School Hollywood Little Red School
Maximum Capacity
80 Children 75 Children 50 Children
Program Academic/Play Academic Academic
Months of Operation
Year Around January-November September -June
Hours of Operation
6am-7pm 9am-5pm 9am-3pm
Age 2-5 years 2-5 years 2.5-4 years
Price $1,250 $1,100 $1,300
Location West Hollywood Beverly Hills Hollywood
Lunch Program Included Not Included $300 Extra
Other Inclusions Mobile App None Swimming Lessons
SWOT AnalysisStrengths
- Quality teachers- High tech teaching tools- Proprietary Web application - Patented and branded mobile app - Monitor children on live camera - Staff reachable on mobile phones
Weaknesses- Single facility- New business/unknown brand- Employee turnover- Technical glitches- Competing app developers- Exorbitant start-up cost , daily cost
and maintenance cost
Opportunities- Franchising opportunities- Corporate subsidies- Industry growth- Global mobile app market- The possibility of additional
buildings
Threats- Competition from local daycare centers- More government regulations- Liabilities- Economic downturn
Senda
Operations PlanBernard Isiko, VP of Operations
Bernard
Operations Plan Location Office Operations Regional Map Street View of Location Floor Plan Layout Licensing and Permits
Bernard
Location
7110 Santa Monica Blvd., West Hollywood, CA 90046Space: 14,000 SF
Hours of Operation:Monday – Friday6:00AM – 7:00PM
Maximum capacity of children: 80
Bernard
Map
Bernard
Front View of Location
Bernard
Outdoor Playgrounds
Bernard
Floor Plan
Bernard
Daily Schedule
Bernard
Licensing and Permits Business License (West Hollywood)
◦ The California Department of Social Services, Community Care Licensing Division (DSS, CCLD)
Articles of Organization (California)◦ To form an LLC and be approved by the Secretary of State
Employer ID Number (EIN for State and Federal Taxes)◦ Shall be obtained from the Internal revenue◦ Parents will use EIN to claim child care expenses on tax returns
Insurance◦ General Liability, Professional, and Abuse/Molestation insurance
covering bodily injury to children and guests in the amount of $1,000,000 per occurrence and $3,000,000 total
Bernard
Human Resource ManagementMitra Khiabanian, VP of Human Resources
Mitra
Strategic Human Resource Management
Company Structure
Recruitment
Strategic Staffing
Retention
Competitive Advantage
Training and Development
Mitra
Company Structure
Chief Executive Officer
Operations Information Technology
Human Resources
Mitra
Finance Marketing
Recruitment
Mitra
Strategic Staffing
Resources: Referrals and LinkedIn
Depending on the position, 0-2 years education
and experience
Conduct background check and screening
Mitra
Compensation (cash and benefits) Health insurance, offered after probation 40% off for child of employee Paid training Paid Time-off
◦ Paid 5 days per year sick leave◦ Paid 5 days per year personal leave◦ Paid family leave
Disability Appreciation
◦ Employee recognition◦ Publicizing achievements
Mitra
Retention
Competitive Advantage
Mitra
Competing Through Sustainability and Technology
Kids & ParentsShareholdersEmployees
Training and Development
Mitra
E-learning
Why Training?
Shapes the company’s future Attracts and keeps high-performing employees
Why Development?
Provides team interaction Addresses the individual needs of the students Gives instructors a chance to motivate the team
In-house
Number of Students 20 40 60 80Salary Budget (35% of forecasted sales) $9,713 $18,463 $27,213 $35,963 Cost Per Student $486 $462 $454 $450
0
10
20
30
40
50
60
70
80
90
Number of Students
$430
$440
$450
$460
$470
$480
$490
Cost Per Student
Mitra
Monthly Cost Per Student
Information Technology PlanVic Melkonian, VP of Information Technology
Vic
Information Technology PlanProduct OverviewStudent ToolsOnsite Security
Vic
Product OverviewWeb site: www.ladybugdaycare.comWeb applicationMobile app, patent pendingBiometric attendanceEncrypted student enrollment database with
cloud replication
Vic
Web Site www.ladybugdaycare.com
Vic
Mobile App Ladybug Mobile App
Vic
Process Flow Diagram
Vic
Student ToolsA healthy child development starts early, and this is a priority for us. We utilize cutting-edge technology:
◦ Apple computers (iMac)◦ iPads and Mini iPads◦ Color laser printers◦ Large-screen TVs for viewing DVD and Blu-Ray
curriculum
Vic
Onsite SecuritySecurity methods provide peace of mind to current customers, and a good impression to potential customers
◦ High definition surveillance cameras/recorder◦ Remote video monitoring on mobile devices◦ Biometric check in and out to confirm identity◦ Smart alarm system, controlled by our mobile app◦ Security guard during business hours
Vic
Financial PlanJohn Dawson, President and VP of Finance
John
Financial Plan Statement of Assumptions Financial Requirements Startup Costs Projected Income and Expenses Income Statements Balance Sheet Statement of Cash Flows Key Financial Ratios Exit Strategy
John
Statement of Assumptions
John
Tuition: $1,250 per month
Annual Revenue: $1,250,000Annual Expenses: $925,000
Student Capacity:80 by the end of the fourth month
Financial Requirements Total investment capital required : $660,000
◦ Outside Investment: $530,000 (80%) for a 25% stake in the company. Partners Investment : $130,000 (20%) to retain a 75% stake.
Investment return: 9% amortized over 5 years for outside
investors:
◦ Loan amount to outside investors $530,000
◦ Total finance cost $130,000
◦ Total debt to repay $660,000
◦ 60 monthly payments $11,000
◦ All figures are rounded
John
Startup Cost Requirements
John
Startup Working Capital 200,000 Software Development (breakdown below) 100,000 Technology Equipment and Cameras 45,000 Furniture 35,000 Playground Equipment 35,000 Building Renovation 30,000 Advertising 25,000 Salary and Wages 20,000 Building Lease (first and last month) 46,000 Miscellaneous 10,000 Grand Opening Event 10,000 Supplies 10,000 Business Licenses 1,000 Building Security Deposit 5,000 City Utility Fees 2,000 Insurance 10,000 Total 584,000Contingency (15%) 88,000 Total Financing Cost 672,000
Software Development Costs
Android Mobile App 40,000
iOS Mobile App 20,000
Microsoft Mobile App 25,000
Web Application 10,000
Web Site, Secure 5,000
Total 100,000
John
Projected Income and Expenses
John
Income Amount Frequency
Registration 100 year
Tuition 1,250 month
App 15 month
Expenses Amount Frequency
Salary and Wage Expense 10k – 35k month
Payments to Investors 11,000 month
Building Lease 23,000 month
City Utilities 2,000 month
Marketing Costs 2,000 month
Insurance 800 month
Miscellaneous Expenses 1,000 month
Figures are rounded
Income Statement12 Months Ended December 31st, 2016
JohnFigures are rounded
Gross Sales Registration 8,000 Tuition 1,050,000 App 9,000 Net Sales 1,067,000 Cost of Goods Sold 85,000 GROSS PROFIT 982,000
Expenses Building Lease 276,000 Payment of initial investor financing 134,000 City Utilities 24,000 Marketing Costs 24,000 Insurance 10,000 Salary and Wage Expense 373,000 City Business Licence Fee 1,000 Initial Startup Costs 239,000 Depreciation Expense 20,000 Miscellaneous Expenses 12,000 Total Expenses 1,113,000
Net Income Before Taxes (131,000) 25% provision for taxes Net Profit After Taxes (131,000)
Income Statement5 Years Ended December 31st, 2020
JohnFigures are rounded
Gross Sales Total Registration 40,000 Tuition 5,850,000 App 159,000 Net Sales 6,049,000 Cost of Goods Sold 106,000 GROSS PROFIT 5,943,000
ExpensesBuilding Lease 1,380,000 Payment of initial investor financing 670,000 City Utilities 120,000 Marketing Costs 120,000 Insurance 50,000 Salary and Wage Expense 2,117,000 City Business License Fee 4,000 Miscellaneous Expenses 60,000 Initial Startup Costs 239,000 Depreciation Expense 101,500 Total Expenses 4,862,000
Net Income Before Taxes 1,081,000 25% provision for taxes 271,000 Net Profit After Taxes 810,000
Balance Sheet5 Years Ended December 31st, 2020
John
2016 2017 2018 2019 2020Assets
Cash (131,868) 283,984 298,734 310,484 320,234 Mobile App 85,000 93,500 102,850 113,135 124,449 Supplies 10,000 10,000 10,000 10,000 10,000 Capital Equipment (after depreciation) 124,700 104,400 84,100 63,800 43,500
TOTAL ASSETS 87,832 491,884 495,684 497,419 498,182
LiabilitiesLoan Payable - to investors 535,761 401,821 267,880 133,940 - Taxes - 70,996 74,683 77,621 80,058 Total Current Liabilities 535,761 472,816 342,564 211,561 80,058
NET WORTHStockholders' Equity (447,929) 19,067 153,120 285,858 418,124
Total Net Worth (447,929) 19,067 153,120 285,858 418,124
TOTAL LIABILITIES & NET WORTH 87,832 491,884 495,684 497,419 498,182
Statement of Cash Flows5 Years Ended December 31, 2020
John
2016 2017 2018 2019 2020CASH RECEIPTSIncome from Sales Cash Sales 1,067,000 1,223,000 1,238,000 1,253,000 1,268,000 Collections 0 0 0 0 0 Total Cash from Sales 1,067,000 1,223,000 1,238,000 1,253,000 1,268,000
Income from Financing
Loan Proceeds 537,696 -
- - - Owner's Equity (447,929) 19,067 153,120 285,858 418,124 Total Cash from Financing 89,767 19,067 153,120 285,858 418,124 Other cash receipts 0 0 0 0 0 TOTAL CASH RECEIPTS 1,156,767 1,242,067 1,391,120 1,538,858 1,686,124
CASH DISBURSEMENTSExpenses Operating Expenses 1,113,868 795,076 800,326 805,576 810,826 Capital Purchases 245,000 - - - - Loan Payments 133,940 133,940 133,940 133,940 133,940 Income Tax Payments - 70,996 74,683 77,621 80,058 TOTAL CASH DISBURSEMENTS 1,492,808 1,000,012 1,008,950 1,017,137 1,024,825
NET CASH FLOWOperating Cash Balance - (336,041) (93,986) 288,184 809,905 Cash receipts 1,156,767 1,242,067 1,391,120 1,538,858 1,686,124 Cash disbursements 1,492,808 1,000,012 1,008,950 1,017,137 1,024,825 ENDING CASH BALANCE (336,041) (93,986) 288,184 809,905 1,471,204
Key Financial Ratios
John
Return on Investment(Gain from Investment - Cost of Investment) / Cost of Investment
Gain From Investment 1,471,204 Cost of Investment 672,120
ROI 1.19
Return on EquityNet Income/Shareholder's Equity
Net Income 1,471,204 Shareholder's Equity 418,124
ROE 3.52
Exit Strategy
John
Estimated Value After 5 Years $1,471,20475% founder's share $1,103,40325% Outside Investor's Share $367,801
Continue as is, franchise or sell business?
Estimated App Value $125,000 calculated by giving the $85,000 in app development a 10% increase in value per year.
The app is forecasted to achieve $60,000 annual sales by the end of the 5th year.
Thank You!
Ladybug Daycare Center