1

Business Plan

Little Munchkins Child Care LLC

OWNER

Rebecca Dale
822 Longbeard Lane
Capon Bridge, WV 26711
540-931-6493
littlemunchkins@gmail.com
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Table of Contents

Business Plan.......................................................................................................................1

OWNERS....................................................................................................................................1

Executive Summary.............................................................................................................4

III. General Company Description......................................................................................5

IV. Products and Services....................................................................................................6

V. Marketing Plan................................................................................................................7

Marketing Needs..........................................................................................................................7

Marketing Trends.........................................................................................................................7

Economics....................................................................................................................................8

Product.........................................................................................................................................9

Features and Benefits...............................................................................................................9

Customers..................................................................................................................................10

Competition...............................................................................................................................10

Competitive Analysis............................................................................................................11-14

Niche..........................................................................................................................................14

Strategy......................................................................................................................................14

Promotion..............................................................................................................................15

Promotional Budget...............................................................................................................15

Pricing....................................................................................................................................16

Sales Forecast............................................................................................................................17

VI. Operational Plan..........................................................................................................18

Legal Environment....................................................................................................................18

Personnel....................................................................................................................................19

Credit Policies............................................................................................................................19
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Accounts Reveivable.................................................................................................................19

Accounts Payable.......................................................................................................................19

VII. Management and Organization..................................................................................20

VIII. Startup Expenses and Capitalization.........................................................................20

IX. Financial Plan.........................................................................................................20-23

X. Appendices..............................................................................................................24-25
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Executive Summary
Little Munchkins Child Care LLC will become the second child care facility in Romney, WV. It aims to

offer an interactive, safe, and fun environment for children ages 2 months to 12 years. Childrens safety is our

top priority; therefore, we will only hire the best staff to take care of your little munchkins. Our goal is to

become the most sought after child care facility in the Romney Area. We hope to make a profit in the first year

and have 90% of children return the second year. Along with keeping children safe, we believe strongly in

beginning education at a young age. We will incorporate learning in every activity to make sure children are

learning as well as enjoying themselves.

Because Little Munchkins will be one of only two facilities in Romney, WV it will have a big advantage

as far as the market goes. We plan to have a 3000 square-foot building with two play rooms, a learning room, a

nap room, a kitchen, and an outside play area. We will be open from 6AM-6PM, Monday-Fridayc to cater to

working parents. We hope to operate at max capacity with 35 enrolled children and 7 staff members. We will

accept children from ages 2 months to 12 years.

We plan to have plenty of fun activities for the children including a movie theater, board games, toys,

and an outside play area. Our rates start at $125 per week for children ages 6-12 and for every year younger, go

up by $10. We provide two snacks a day for children, and for an extra $25 per week we will provide a healthy

breakfast and lunch. Each staff member will be certified in CPR and will have completed a child development

class prior to beginning work.

If we are able to meet capacity, the first year we expect to make a profit of $50,448. According to the

breakeven analysis formula, worst case scenario I would need to have 31 children at the lowest rate possible per

week in order to break even. This does not include the extra $10 per week addition to each year younger or the

extra $25 per week for meals if a parent chooses to do this.

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III. General Company Description

I. Mission Statement
Little Munchkins Child Care aims to offer an interactive, safe, and fun environment for your
children. Keeping your children safe is our top priority, therefore we will only hire the best staff
to take care of your Little Munchkins.

II. Company Goals and Objectives

Little Munchkins goal is to be the most sought after child care facility in the Romney area. Little
Munchkins objectives are to make a profit in the first year, have 90% of children return the next
year, and an additional 10% of children beginning the second year.
III. Business Philosophy
Along with keeping each child safe, Little Munchkins believes very strongly in learning at a
young age. That is why we will begin incorporating important information, such as ABCs,
123s, colors, and shapes as soon as possible and building on that knowledge as we go. We also
believe every child should enjoy every day at Little Munchkins, so we will have a new, exciting
activity planned for every week.
IV. Marketing
We plan to market Little Munchkins to all parents in Romney, WV and surrounding areas.
V. Industry
The child care industry is always going to be a necessary industry if there are jobs for parents.
There is possibility for growth in the long run. There is the possibility of expanding the child
care center and hiring more staff, so we can have additional children, or the possibility of
opening other locations.
VI. Strengths
Little Munchkins plans to be a very successful company by always putting the childs needs first
and making sure they enjoy learning and being active. One of the biggest competitive strengths
are that we will be one of only two child care facilities in Romney, WV.
VII. Ownership
Little Munchkins will be a LLC to avoid double taxation, to be able to protect our assets, and for
the easy ability to make changes.
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IV. Products and Services

Little Munchkins day care will be one of only two child care facilities in Romney, WV. It will be a child care

facility focused on keeping children safe, happy, healthy, and bright. We will have a 3000-sq. ft. building with

two play rooms, a learning room, a nap room, a kitchen, and an outside play area. We will be open from 6AM-

6PM, Monday- Friday to cater to working parents. We have a max capacity of 35 children and will accept

children from ages 2 months to 12 years. Because we have a full kitchen, we will be able to provide balanced

meals for each child; and with our variety of fun activities, children will get plenty of exercise. In our learning

room, we will target each childs needs individually to help them become the best they can be. In our first play

room, we will have toys and games to cater to each age group. In our second play room, we will have a mini

movie theater set up and quiet games. Because there is only one other child care facility in Romney, our child

care facility will help the community enormously with finding safe, dependable child care for their children. We

will also provide competitive rates for child care starting at $125 per week for children ages 6-12 and going up

$10 dollars per week for each year younger. We provide two snacks per day for each child, but for an extra $25

per week, we will provide breakfast and lunch also. If a child is of school age, we will even have a staff member

waiting outside to get your children off the bus safely. If someone is looking for a friendly, safe, fun experience

for their children, Little Munchkins Child Care is the place to go.
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V. Marketing Plan

Market Needs

Little Munchkins Child Care will be providing the Romney area with a second day care that is much

needed. Little Munchkins day care will fulfill the following benefits for parents:

OPTIONS- Little Munchkins will provide a second, and better option for child care in the Romney area

for children ages 2 months to 12years.

AVAILABILITY- Little Munchkins will be open from 6AM-6PM, Monday-Friday.
CUSTOMER SERVICE- Little Munchkins will provide excellent learning and fun experiences for

your children while keeping them safe.

COMPETITIVE PRICING- Little Munchkins will provide reasonable pricing compared to other

options in the area.

Market Trends

The Market Trend for child care is constantly increasing with a growing number of parents going back

to work. With the current standings with the economy, many parents are opting to go back to work, which is

leaving them with a need for child care. Because these parents decision to go back to work means spending less

time with their children, many parents are opting for child care facilities that are focused on learning and

developing children, rather than a house hold baby-sitter.

Economics
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The total population of Romney, WV is 1,796 people; 389 of these are children under 14. There is only

one child care facility in Romney focused on child development that has a max capacity of 46 children and a 2-

year waiting list, which means 343 children are going without child care. Out of the 1796 people in Romney,

51.36% are families, and 89.85% of families are two income families. This means both parents are working,

which most likely means they need some type of child care. Little Munchkins will have 50% of the market

share, because there is only one child care facility in Romney currently. Even with opening a second child care

facility in Romney, there is still going to be demand for more child care because these facilities combined are

only able to care for less than 100 children, leaving almost 300 without care. This leaves enormous room for

growth of expanding the current location, or even adding a second location.

Potential barriers Little Munchkins may face when entering this market is unfamiliarity. Valley View

Daycare, the only other child care facility in Romney was opened in 1987 and has been the only day care in the

area since. It has never had any competition, but also never had any problems and has been steadily growing

since it opened. Because Little Munchkins will be opening a new facility that the local population has never

heard of, there may be some uncertainty when enrolling children. There also may be location barriers with

finding a suitable location and obtaining all the correct permits for child care. Romney does not have many

uninhabited buildings, and those that are uninhabited are in pretty rough shape, so they may need remodeling

before they would be able to be used. Little Munchkins hopes that the demand for another child care facility

will overcome all the barriers we may face when entering this market. It is obvious, the residents of Romney

need another option for child-care, and we are hopeful that we will be able to show them in time that we are the

best option.

Product
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A potential customer of Little Munchkins Child Care would see Little Munchkins as a new facility in

Romney. They would see a potentially cheaper option for child care, with better hours, and a higher max

capacity. This facility offers a bigger building than the competition with an option for healthy meals provided by

the day care. They also offer child development with potty-training and learning activities.

Features and Benefits

One of the biggest features of Little Munchkins is its 3000- square foot building with multiple rooms

for childrens activities. There are separate rooms for each activity so older children playing will not disturb

toddlers napping. Another feature is the option of parents not having to provide meals for their children. Many

child care facilities require the parent to pack a breakfast and possibly a lunch for their child, as well as snacks.

Little Munchkins provides snacks for every child and has the added option of providing breakfast and lunch.

This option will help many busy parents by freeing their time from preparing meals for their little ones. Little

Munchkins will also provide childrens toilets to make potty-training simpler, and comfortable cots for nap-time

so children will be well rested.

The biggest benefit Little Munchkins provides parents is the ability to not have to worry about their

children, and knowing they are safe and being educated. Little Munchkins will give parents piece of mind that

their children are not only being taken care of, but are also developing their minds and bodies in a healthy way.

Because Little Munchkins provides activities that will not only help childrens brains grow, but will also help

their bodies stay healthy and strong. Little Munchkins also gives parents the benefit of flexibility with extended

hours.

Customers
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Little Munchkins targeted customers are any parents in the Romney area with children ages 2 months

to 12 years. These customers are typically ages 18-45, male or female, and they must be in Romney or the

surrounding area. There are no requirements for income level, social class, occupation, or education. As long as

the parents are able to care for their children, pick them up on time, and make payments on time, Little

Munchkins does not discriminate.

Competition

Valley View Daycare and local baby-sitters are Little Munchkins competition. Valley View Day Care is

located in Romney, about a mile from the elementary school. They have been in business since 1987 and have

been able to monopolize Romney ever since. They have competitive pricing and are even able to offer lower

rates for needy families thanks to the DHHR grant. However, their building is not as big as ours and does not

have as many options as far as learning, outside activities, and healthy eating.

Local baby-sitters are always around, and are always in competition with local child care facilities. One

major advantage to baby-sitters is their hours may be more flexible than a typical child care facility and some

may even be able to keep children overnight. They are usually cheaper than child care facilities as well, because

they do not have as many costs as a child care facility. Disadvantages to baby-sitters are that they may not be

insured or properly trained if an emergency were to happen with a child. They also do not provide as much

interaction with other children or learning experiences and activities as child-care facilities do.

Competitive Analysis
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Importance to
Competitor A Competitor B
Factor Me Strength Weakness
(Valley View) (Baby-sitters)
Customer

Products Child Care N/A N/A Child Care Child Care 1

125 per week Good Does not Offers discount Usually around 1

ages 6-12 and pricing, also offer pricing for needy 25-35 dollars a

going up $10 offers discount families due to day

Price
for every year pricing pricing for DHHR grant.

younger including needy

meals families

Focused on Interactive Not much Also, offers fun Not as high 1

learning and games to experience learning activities quality child care-

healthy children promote in this and licensing and may not have

Quality and meets learning and industry safety standards. correct

licensing and healthy certifications

safety standards meals and

activities

One of two Gives a Still not One of two Multiple baby 3

Selection licensed child greater much of a licensed child sitters in

care facilities selection selection care facilities surrounding area

Reliability Flexible hours 6AM-6PM May not be Also, may charge May be able to be 2
Monday-
able to stay extra if parent is more flexible
Friday
late or may late with hours than a

charge extra typical child-care

if parent is facility
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Importance to
Competitor A Competitor B
Factor Me Strength Weakness
(Valley View) (Baby-sitters)
Customer

late

Very stable Strive to May change Also, may change Would be the 3

environment keep child care child care same baby-sitter

children on workers workers which would

Stability a daily based on keep child stable,

routine for age, which but may not be on

stability could disrupt a daily routine.

a child

All child care Parents Founder of Been in business Could be a family 2

staff must take know the since 1987 with member or family

a CPR and children are business no known issues friend that the

child well taken does not family has known

Expertise
development care of have for years

course experience

in child

care

Does not have a N/A N/A Has been around Could be a well- 3

known for 30+ years known babysitter

Company
reputation yet in the area or
Reputation
could be

unknown

Location Local to Close to May not be Right beside of Could possibly be 2

Romney Romney convenient Elementary

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Importance to
Competitor A Competitor B
Factor Me Strength Weakness
(Valley View) (Baby-sitters)
Customer

residents for for anyone school-very closer to parent

convivence out of the convenient for

Romney parents whose

area children are of

school age.

Brand new New New may Building is a little In someones 4

building with equipment not appeal to outdated and toys home which

Appearance cots and and some parents seem to be could mean

childrens teaching scattered cluttered, and

toilets styles everywhere possibly unsafe

Plans to appeal One of two May be a They have the Most baby-sitters 4

to parents who daycares little more knowledge and dont advertise

Sales
werent able to expensive experience their services they
Method
get into Valley because of method are usually word

View extra costs of mouth

Plans to Word in a Advertising Does not Does not 5

advertise a new small town in so many advertise advertise

and better like ways could

option for child Romney be expensive

Advertising
care in Romney spreads

by newspaper, very fast

internet, and

through word
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Importance to
Competitor A Competitor B
Factor Me Strength Weakness
(Valley View) (Baby-sitters)
Customer

of mouth

Niche

Little Munchkins is different from most child care facilities in the way we focus on a childs growth and

development. These things are really at the center of our business at Little Munchkins. Our core goal is to make

each child as happy as they can be, while also making sure they are at least meeting learning requirements for

their age, if not go above and beyond them.

Strategy

Little Munchkins Child Care will run advertisements in Yellow Pages, The Hampshire Review, and on

Facebook. These advertisements will be used to target specific customers and make them aware of our services

for their little ones. We plan to target families who have working parents and are not able to continuously

contribute to the growth and development of their child. That is what we are here to do. By using these

advertisements, we plan to make a profit in the first year and have 90% of children return the next year, with an

additional 10% of children beginning the second year.

Promotion

Along with advertising in the local newspaper, and on Facebook, Little Munchkins will also have an

open house day where potential parents can come and tour our facility and ask questions. Other than start-up

advertising, we will continue to run advertisements every 3 months, with extra advertisements being ran in July

and August, when children are beginning to go back to school. Facebook is the lowest cost and most effective

way of advertising in todays industry. At least 50% of adults have a Facebook page, and if someone doesnt,
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chances are someone in their family or close friends do. Facebook is completely free to businesses, but is also a

great way to advertise up and coming businesses. Other than paid advertising, Facebook, and our open house,

we will also pass out flyers at local PTA meetings and childrens activities such as sports events and local

parks. Little Munchkins would like to project a professional image that is targeted to help each child learn and

grow to the best of their ability. We also plan to keep records of customers and contact them 30 days after they

initially enroll their child, and every year afterward.

Promotional Budget

Most of our advertising is either low or no cost. The ad in the Hampshire review is only $11 per week

for the Wednesday edition and the Weekender. Facebook advertising and flyers are completely free. The only

cost we will have initially with start-up is the costs associated with our open house and paper for the flyers. We

expect to use less than one box of paper, which is around $25 and one toner which is $100. The costs of the

open house are balloons, streamers, bubbles, and snacks. For all these things, we expect to spend around $150.

Total start-up advertising costs would be around $300, and ongoing would be less than $50 a month.

Pricing

Our pricing is about the same as other options near us. We charge $125 per week for children ages 6-12,

and for each year younger the cost goes up $10 per week. We also provide meals for children for an extra $25

per week. Local babysitters charge around $25-35 per day, which at the lowest equals $125 per week. These

prices are usually for children of all ages, and it varies on the babysitter whether or not they provide meals. The

only other child care facility in the area is Valley View Daycare, which is able to charge much lower prices due

to a DHHR grant that provides discounts to families below a certain income. However, they are completely

maxed out at capacity and have a two-year waiting list, so they are not an option for most parents. Many

customers focus on quality of service instead of price, especially when it comes to taking care of their children.
 Little Munchkins Child
Care
16

Parents must pay the weekly fee on the last day their child is there for the week, usually Friday. There will be no

credit or advances for parents. Altogether, our pricing is pretty competitive compared to the other options.
Little Munchkins Child Care
Sales Forecasting Model Max
Sales Forecast
Capacity
3/10/2017
Little Munchkins
Child Care
CONFIDENTIAL
Product Sales Data
Cost Per Year
(Cost per week X
number of children
X 52 weeks per
Children Aged 6-12 Years year)
Year 1 estimated unit sales-5
children $32,500.00
Children Aged 5-6 Years Cost Per Year
Year 1 estimated unit sales-5
children $35,100.00
Children Aged 4-5 Years Cost Per Year
Year 1 estimated unit sales-5
children $37,700.00
Children Aged 3-4 Years Cost PerVI. Operational Plan
Year
Year 1 estimated unit sales-5
children $40,300.00
Location
Children Aged 2-3 Years Cost Per Year
Year 1 estimated unit sales-10
children $85,800.00
In a location, we would need at least 3000 square-foot of space with at least 5 separate rooms, a kitchen,
Children Aged 2 months-2 Years Cost Per Year
Year 1atestimated
least twounit sales-5
large bathrooms, and enough room outside for a play area and a fence. This building would
children $45,500.00
TOTAL SALES need to be built recently, but$276,900.00
preferably we are willing to remodel if necessary. It would need to have power,

running water, cable, internet, and heat/air conditioning. The location would preferably be near either the

elementary or the middle school, or in the center of Romney. We need to have as much parking as possible, at

least 50 parking spaces, as many close to the entrance as possible. The estimated price we would pay for leasing

a 3000+ square-foot building in Romney is around $1000 a month, including remodeling expenses. Utilities

including electric, water, sewer, internet, cable, insurance, and food are expected to be $600 per month. And

initial startup costs including: cots, toilets, furniture, TVs, etc. would be around $5000. Our business hours will

be 6AM-6PM, Monday-Friday.
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Legal Environment

In order to open a child care facility, the provider must have a child care license. In order to get this

license, the provider must pass all of the following: Fire Safety Drills, Health classes including SIDS and CPR,

child nutrition and physical activity classes, physical space requirements, record keeping requirements, and

sanitation requirements. Along with those things, each staff member must be above the age of 18, pass a back-

ground check, and have passed a child CPR course. Also, each child enrolled in the facility must be immunized

and parents must be involved in decision making for the child care facility. The child care facility must also

have insurance on each child and staff member in the facility.

Personnel

There will be 7 staff members, including myself, which meets the child to staff ratio requirements by

law. Each staff member must pass a background check, CPR certification, and child development class. We will

hold a two-step interview process, the first interview being a typical sit down interview with myself, the second

interview being an interactive interview with the children. We will have 2 staff members for children 2 years old

and younger, 3 staff members for children age 2-5, and 2 staff members for children age 6-12. Each staff

member will be assigned an age group and given duties within that age group. Also, each staff member will

rotate with administrative duties each week, such as filing, taking payments, cleaning, etc. Each staff member

will start at $20,000 per year and we will hold reviews annually. Once we open and know how many children

we will have, I will prepare schedules and procedures for each staff member.

Credit Policies and Accounts Receivable

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Each parent that has a child enrolled at Little Munchkins, will have the option of paying on a weekly, or

monthly basis. We will accept cash, check, and credit cards and will also have the option for automatic

payments. Each payment is due at the end of the week on Friday, or if they decide on a monthly basis, the first

of the month. Each parent will be given one free pass on a late or returned payment, but if it happens a second

time, we will give the parent one week to get caught up or remove their child from enrollment.

Accounts Payable

We plan to get a company credit card and set up automatic payments for all accounts payable (rent,

utilities, insurance, electric, water, sewer, food) and then pay it all at the end of the month when the credit card

bill is due and once we have accumulated enough cash.

VIII. Management and Organization

I plan to manage the business on a day to day basis, I have accounting experience and will have a

Business Administration Degree in order to handle the administrative duties, I also plan to appoint a backup

once we hire staff, in case for any reason I would not be able to be there. I plan to also appoint someone in

charge of activities and child development. We dont plan to have a board of directors or advisory board, but

plan to hold meetings with parents once a month to input their ideas. We will bank at a local bank, with a

local insurance agent, and find a local accountant.

VII. Startup Expenses and Capitalization

The estimated cost of a building is $150,000 with remodeling costs estimated at another $50,000. This

was estimated by looking at locations for sale nearby and speaking with a contractor about remodeling. Because
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this is an LLC, we plan to get a business mortgage loan to cover these amounts. Other startup costs will be

minimal with $5,000 worth of equipment needed and around $300 for advertising. These were estimated by

looking online at how much each product costs individually. We should be able to use cash we have saved for

these additional costs.

IX. Financial Plan

Twelve Month Profit and Loss Projection

When estimating the calculations for the twelve-month profit and loss projection I used estimations and

research. For the profit, I used max capacity calculations, for an estimate of which aged children I would have.

For the expenses, I used research for advertising for how much it would be per month for an ad in the local

newspaper. I used estimations for payroll at 20,000 a year for 7 employees. For the insurance and taxes and

licenses I did research on the average cost in the area for this type of business. I estimated the utilities and rent

based on educated guesses of what they usually cost nearby.

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Twelve
Month
PROFIT & LOSS
PROJECTION
A
JA FE M AP M JU JU SE OC N DE
U YEA
N- B- AR R- AY N- L- P- T- OV C-
G- RLY
17 17 -17 17 -17 17 17 17 17 -17 17
17
REV
ENUES
(SALES
)
$ $ $ $ $ $ $ $ $ $ $ $
21, 21, 26, 21, 21, 26, 21, 21, 26, 21, 21, 26, $
Reven 30 30 62 30 30 62 30 30 62 30 30 62 276,
ue 1 0 0 5 0 0 5 0 0 5 0 0 5 900
EXP
ENSES
TOT $ $ $ $ $ $ $ $ $ $ $ $
AL 18, 18, 19, 18, 18, 19, 18, 18, 19, 18, 18, 19, $
EXPEN 56 56 37 56 56 37 56 56 37 56 56 37 226,
SES 6 6 1 6 6 1 6 6 1 6 6 1 012

$ $ $ $ $ $ $ $ $ $ $ $ $
Net
2,7 2,7 7,2 2,7 2,7 7,2 2,7 2,7 7,2 2,7 2,7 7,2 50,8
Profit
34 34 54 34 34 54 34 34 54 34 34 54 88

Cash Flow Projection

Little Munchkins Child Care
60,000
40,000
Cash Flow Projection
20,000 Cash on Hand Minimum Alert
Cash on Hand 0

Period

Projected Cash Flow

The projected cash flow at max capacity seems to be doing pretty well. Even starting at zero, I

would make enough in the first month to cover expenses and still leave enough cash left over for the next

month. Because most parents will choose to pay on a weekly basis, I will always have a steady cash flow
 21

throughout the month. Especially because I plan to use a credit card throughout the month and pay all bills at

the end of the month on the credit card bill, I will have enough cash throughout the month to keep a steady flow.

Break Even Analysis

According to the breakeven analysis formula, worst case scenario I would need to have 31

children at the lowest rate possible per week in order to break even. This does not include the extra $10 per

week addition to each year younger or the extra $25 per week for meals if a parent chooses to do this.
 22

Opening Day Balance Sheet

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X. Appendices

Little Munchkins C
Along with keeping each child safe,
Little Munchkins believes very Little Munchkins C
strongly in learning at a young age. interactive, safe, an
That is why we will begin children. Keeping y
incorporating important information, priority, therefore w
such as ABCs, 123s, colors, and
to take care of you
shapes as soon as possible and building
on that knowledge as we go. We also
believe every child should enjoy every
day at Little Munchkins, so we will
have a new, exciting activity planned
for every day.
 24

About Us

We will have a 3000-sq. ft. building

with two play rooms, a learning room, a

nap room, a kitchen, and an outside

play area. We will be open from 6AM-

6PM, Monday-Friday to cater to

working parents. We have a max

capacity of 35 children and will accept

children from ages 2 months to 12

years. Because we have a full kitchen,

we will be able to provide balanced

Pricing
meals for each child; and with our
We will also provide competitive rates for
variety of fun activities, children will
childcare starting at $125 per week for
get plenty of exercise. In our learning
children ages 6-12 and going up $10
room, we will target each childs needs
dollars per week for each year younger.
individually to help them become the
We provide two snacks per day for each
best they can be. In our first play room,
child, but for an extra $25 per week, we
we will have toys and games to cater to
will provide breakfast and lunch also. If a
each age group. In our second play
child is of school age, we will even have a
room, we will have a mini movie
staff member waiting outside to get your

children off the bus safely. If someone is

looking for a friendly, safe, fun experience

for their children, Little Munchkins Child

Care is the place to go.