January 2001

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Table of Contents
1.0

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2
Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0

Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1
Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2
Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3.0

Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1
Company Locations and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.0

Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.1
Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2
Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3
Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4
Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5
Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4
4
5
5
6
6

5.0

Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.1
Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2
Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6
6
6
7

6.0

Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1
Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

7.0

Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1
Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2
Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3
Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4
Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5
Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9
9
10
11
13
13

Safe Kids Child Care

1.0 Executive Summary
Safe Kids Child Care is a start-up organization that provides day care services to Lynn, MA, a
suburb of Boston. This mid-sized child care facility serves children from three months to six
years of age. Their services are safe and secure, providing the parents with an excellent place
where their children can be taken care of.
The Market
The child care market is quite competitive in the Boston area. There are over 300 different
facilities. There are two general types of facilities. The larger style is commercially run,
typically a corporate franchise center. These facilities are both regional and national. Currently,
the four largest child care facilities in the USA account for 29% of the market. There are also
many different smaller locally run and owned faculties. While the largest facilities can host
between 20-100 children, the locally run centers typically have a maximum capacity of 20
children.
As mentioned earlier, the market is quite competitive. Safe Kids will employ two strategies to
differentiate themselves. The first is a pricing structure where Safe Kids' services will be priced
at 5%-10% less than the larger commercial run facilities. The second differentiating effort will
be benchmarked customer service. A customer-centric philosophy will be infused within the
entire organization. Safe Kids will spend extra money to attract and train the best employees.
This is especially important because it is the employees that interact with both the children and
parents and will have the best chance to impress them enough to turn them into a loyal
customer as well as to be vocal in telling their friends about their positive child care experience.
The Customers
Safe Kids will be concentrating on two different target customer segments. The first is full-time
working couples. This group is forecasted to account for 80% of Safe Kids' business. This
group is growing at a rate of 25% and there are over 100 potential customers in a 10 mile
radius. The second group of customers are drop in, customers who use Safe Kids sporadically,
when ever the need arises. This group is growing at 20% and there are 50 potential families.
The Management Team
Safe Kids will be lead by two child care industry veterans, Andrea Child and Danielle
Freelander. Andrea has a sales, marketing, and management background within the industry,
having spent seven years at The Toddler Warehouse. During her tenure at Toddler Warehouse,
Andrea helped grow the business from $98,000 in yearly revenue to over $4.6 million.
Andrea's partner is Danielle Freelander who has a finance and administration background.
Previous to Safe Kids, Danielle worked for The Rug Rat Vault, the seventh largest child care
corporation in the USA. While Danielle was at The Rug Rat Vault as CFO, she was able to
increase operating profits by 12%, an increase that is generally unheard of in this industry.
Safe Kids is an exciting opportunity that provides safe and secure child care to the Lynn, MA
neighborhood. Safe Kids will reach sustainable profitability by month seven and generate
$89,000 in profits by year three. This will be a 13.21% margin off of $674,000 in sales.
Through a combination of well-priced services, outstanding customer service, and a well
seasoned management team, Safe Kids will quickly gain market share and a reputation as a
premier child care provider.

Page 1

Safe Kids Child Care

1.1 Mission
Safe Kids Child Care aims to offer safe and secure child care at all times. Close personal
attention to each child is essential to providing a quality experience for all children; therefore,
adequate personnel will be hired to ensure each child has the proper supervision will in our
care.

1.2 Keys to Success

Keys to success for the company will include:
1.
2.
3.
4.

Maintaining a reputable and untarnished reputation in the community.

Quality care.
Competitive pricing.
Flexible hours.

2.0 Company Summary

Safe Kids Child Care is a start-up managed by two partners. Both have extensive experience in
the child care industry, and have maintained excellent reputations in this same industry. In
addition, these two partners are capable of handling the sales/management and
finance/administration areas, respectively.

2.1 Company Ownership

This business will start out as a simple proprietorship, owned by its founders. As the operation
grows, the owners will consider re-registering as a limited liability company or as a
corporation, whichever will better suit the future business needs.

2.2 Start-up Summary

The company founders, Ms. Child and Ms. Freelander, will handle day-to-day operations of the
business and will work collaboratively to ensure that this business venture is a success.
It is estimated that the start-up costs will be $3,000 (including legal costs, advertising, and
related expenses). An additional amount of $67,000 will be required as start-up assets. The
start-up costs are to be financed in equal portions by the owners' personal funds and by a
$30,000 5-year loan.

Page 2

Safe Kids Child Care

Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Brochures
Stationery etc.
Activity Supplies
Food Preparation Supplies
First Aid Supplies
Cleaning Supplies
Nap Time Bedding
Other
Total Start-up Expenses

$1,000
$350
$100
$250
$300
$200
$150
$250
$400
$3,000

Start-up Assets Needed

Cash Balance on Starting Date
Other Current Assets
Total Current Assets

$67,000
$0
$67,000

Long-term Assets
Total Assets
Total Requirements

$0
$67,000
$70,000

Funding
Investment
Owner - Child
Onwer - Freelander
Other
Total Investment
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Current Liabilities

$20,000
$20,000
$0
$40,000
$0
$0
$0
$0

Long-term Liabilities
Total Liabilities

$30,000
$30,000

Loss at Start-up
Total Capital
Total Capital and Liabilities

($3,000)
$37,000
$67,000

3.0 Services
Safe Kids Child Care offers child care services for ages from 3-month infants to 6 years old.
Hours of operation are from 6:30 A.M. to 7:30 P.M., Monday through Friday.

Page 3

Safe Kids Child Care

3.1 Company Locations and Facilities
Safe Kids Child Care will base its' operations in Lynn, Massachusetts, a suburb of Boston. The
facility will originally consist of a 1,300 sq. ft. house in a quiet, residential neighborhood. The
yard will be fully fenced in, to ensure no one can either come in or wander away. The yard will
be furnished with safe, entertaining toys, as well as a sandbox.
The house will be used for rainy-day activities and the serving and preparation of meals. The
house will also contain toys, games, and books for the entertainment of the children.

4.0 Market Analysis Summary

Safe Kids Child Care is a business that has become necessary in today's fast-paced world.
There are an increasing amount of families who have become dependent on two incomes,
which has created the necessity of the child care industry. Indeed, it has. There are over 300
facilities in the area that provide similar services to Safe Kids Child Care, each of these has a
large client base, and a lucrative business. There is no doubt that there is room in the market
for a high-quality child care facility.

4.1 Market Segmentation

Safe Kids Child Care has a focus on meeting the local need for child care services within the 10mile radius of Lynn. Children are taken in flexibly on either a full-time or part-time basis.

Full-Time Working Couples

The company wants to establish a significantly large full-time regular client base in order to
establish a healthy, consistent revenue base to ensure stability of the business. Customer
relations are extremely important, as it is imperative to keep the parents pleased in order to
keep their children in the daycare center.
Part-Time Workers / Drop-Ins
Part-time workers and drop-ins comprise approximately 20% of revenues. While this market is
not the primary focus, sufficient flexibility to handle this secondary market is important to
producing supplemental revenues.

Page 4

Safe Kids Child Care

Table: Market Analysis
Market Analysis
Potential Customers
Local Residents
Drop-ins
Other
Total

Growth
25%
20%
0%
23.33%

2001
100
50
0
150

2002
125
60
0
185

2003
156
72
0
228

2004
195
86
0
281

2005
244
103
0
347

CAGR
24.98%
19.80%
0.00%
23.33%

Market Analysis (Pie)

Local Residents
Drop-ins
Other

4.2 Target Market Segment Strategy

The target market for Safe Kids Child Care is full-time working couples. Referral marketing is
the key type of marketing strategy utilized. Maintaining and further enhancing its reputation in
the community is crucial to gaining additional market share of this target market.

4.3 Market Needs

With inflation continuing to increase every year, it has become necessary for more families to
rely on two incomes to survive. In turn, this increases the demand for child care facilities. We
do not foresee this trend turning in the near future, and intend to capture a share of this
market.

Page 5

Safe Kids Child Care

4.4 Service Business Analysis
The child care business is lucrative, as mentioned before. As a result, there are many centers
that provide quality care for children in the same area as Safe Kids. The child care industry is
split between large, commercially-run centers and smaller, locally-owned centers. Safe Kids
will compete with the small care centers, this is where the main competition lies. The company
is confident that this will be a successful venture because of the quality of its managers and
the capability of its Care Staff, which is mentioned in more detail in the Personnel section.

4.5 Competition and Buying Patterns

There are over 300 child care providers in the local area. The larger commercial chain child
care centers, such as KinderCare, have a majority of the market share. These larger chains
compete well because of a good reputation among the consumer market. Safe Kids Child Care
offers a lower staff to child ratio, which is appealing to most parents. Additionally, the
company maintains child care fee levels that are 5-10% below the average of that of the large
commercial chain child care fees.

5.0 Strategy and Implementation Summary

Safe Kids Child Care will succeed by offering its clients' children a safe and secure care
environment, and close personal attention. The goals of the center are dual-sided: to help
parents feel good about the care of their children, and to make it a safe, educational, and fun
experience for the child.

5.1 Competitive Edge

Child care competitive edge is the facility's efforts in obtaining all appropriate licensing and
certifications. Additionally, thorough pre-hire background screenings are performed on all
individuals before hired for employment.

5.2 Sales Strategy

Safe Kids Child Care will make a significant profit through the excellent care of children. Even
though Safe Kids charges less, the company will see profit within the first year due to
beneficial word-of-mouth advertising. The company expects to double its' clientele every six
months, for the first 18 months.

Page 6

Safe Kids Child Care

5.2.1 Sales Forecast
As the following table shows, the company plans to deliver sales of approximately $262,000 in
the first year, $515,000 in the second year, and $674,000 in the third year plan
implementation.
Table: Sales Forecast
Sales Forecast
Unit Sales
Full-Time Child - Month
Drop-In Child - Hour
Other
Total Unit Sales

2001
640
1,875
0
2,515

2002
1,200
3,500
0
4,700

2003
1,500
4,000
0
5,500

Unit Prices
Full-Time Child - Month
Drop-In Child - Hour
Other

2001
$400.00
$3.00
$0.00

2002
$420.00
$3.15
$0.00

2003
$441.00
$3.31
$0.00

Sales
Full-Time Child - Month
Drop-In Child - Hour
Other
Total Sales

$256,000
$5,625
$0
$261,625

$504,000
$11,025
$0
$515,025

$661,500
$13,240
$0
$674,740

Direct Unit Costs

Full-Time Child - Month
Drop-In Child - Hour
Other

2001
$10.00
$0.75
$0.00

2002
$11.00
$0.80
$0.00

2003
$12.00
$0.90
$0.00

Direct Cost of Sales

Full-Time Child - Month
Drop-In Child - Hour
Other
Subtotal Direct Cost of Sales

2001
$6,400
$1,406
$0
$7,806

2002
$13,200
$2,800
$0
$16,000

2003
$18,000
$3,600
$0
$21,600

Page 7

Safe Kids Child Care

6.0 Management Summary
The two principals, Ms. Child and Ms. Freelander, have impeccable credentials in this industry.
This will benefit Safe Kids Child Care in two ways:
1.
2.

Clients will be brought from previous employers, and

The experience each has will attract new clients.

Andrea B. Child has extensive experience in sales, marketing, and management within the
child care industry. Danielle E. Freelander has extensive experience in the area of finance and
administration, also in the child care sector.

6.1 Personnel Plan

As the Personnel Plan shows, the company expects to make gradual investments in care
personnel over the next three years, always keeping in mind the number of children in need of
care at the center.
Table: Personnel
Personnel Plan
Managers (2)
Care Staff
Other
Total People
Total Payroll

2001
$72,000
$138,000
$0
10
$210,000

2002
$80,000
$252,000
$0
12
$332,000

2003
$84,000
$291,000
$0
13
$375,000

Page 8

Safe Kids Child Care

7.0 Financial Plan
Safe Kids Child Care expects to raise $40,000 as its own capital, and to borrow $30,000
guaranteed from the SBA as a 5-year loan. This provides the bulk of the current financing
required.

7.1 Break-even Analysis

The Break-even Analysis is based on the average of the first-year figures for total sales by
units, and by operating expenses. These are presented as per-unit revenue, per-unit cost, and
fixed costs. These conservative assumptions make for a more accurate estimate of real risk.
Table: Break-even Analysis
Break-even Analysis:
Monthly Units Break-even
Monthly Revenue Break-even

222
$23,063

Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost

$104.03
$3.10
$22,375

Break-even Analysis
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
0

80

160

240

320

400

Monthly break-even point

Break-even point = where line intersects with 0

Page 9

Safe Kids Child Care

7.2 Projected Profit and Loss
As the Profit and Loss table shows, the company expects to continue its steady growth in
profitability over the next three years of operations.
Table: Profit and Loss
Pro Forma Profit and Loss
2001
$261,625
$7,806
$0
-----------$7,806
$253,819
97.02%

Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses:
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Certifications & Inspections
Utilities
Insurance
Rent
Payroll Taxes
Other
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
Include Negative Taxes

2002
$515,025
$16,000
$0
-----------$16,000
$499,025
96.89%

2003
$674,740
$21,600
$0
-----------$21,600
$653,140
96.80%

$210,000
$332,000
$375,000
$0
$0
$0
$0
$0
$0
$1,800
$2,000
$2,200
$2,400
$2,500
$2,600
$1,800
$2,000
$22,000
$3,000
$3,600
$42,000
$18,000
$20,000
$25,000
$31,500
$49,800
$56,250
$0
$0
$0
---------------------------------$268,500
$411,900
$525,050
($14,681)
$87,125
$128,090
$2,610
$1,780
$780
$0
$25,604
$38,193
($17,291)
$59,742
$89,117
-6.61%
11.60%
13.21%
FALSE
TRUE
TRUE

Profit Monthly
$4,000
$2,000
$0
($2,000)
($4,000)
($6,000)
($8,000)
($10,000)
Jan Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

Page 10

Safe Kids Child Care

7.3 Projected Cash Flow
The cash flow projection shows that provisions for ongoing expenses are adequate to meet the
needs of the company as the business generates sufficient cash flow to support operations.
Table: Cash Flow
Pro Forma Cash Flow

2001

2002

2003

Cash Received
Cash from Operations:
Cash Sales
Cash from Receivables
Subtotal Cash from Operations

$261,625
$0
$261,625

$515,025
$0
$515,025

$674,740
$0
$674,740

Additional Cash Received

Non Operating (Other) Income
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$100
$0
$0
$0
$0
$0
$0
$261,725

$0
$0
$0
$0
$0
$0
$0
$0
$515,025

$0
$0
$0
$0
$0
$0
$0
$0
$674,740

Expenditures
Expenditures from Operations:
Cash Spending
Payment of Accounts Payable
Subtotal Spent on Operations

2001

2002

2003

$3,742
$272,236
$275,978

$7,348
$445,103
$452,451

$15,437
$563,833
$579,270

Additional Cash Spent

Non Operating (Other) Expense
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$0
$7,200
$0
$0
$0
$283,178

$0
$0
$0
$0
$10,000
$0
$0
$0
$462,451

$0
$0
$0
$0
$10,000
$0
$0
$0
$589,270

Net Cash Flow

Cash Balance

($21,453)
$45,547

$52,574
$98,121

$85,470
$183,591

Page 11

Safe Kids Child Care

Cash
$70,000
$60,000
$50,000
$40,000

Net Cash Flow

$30,000

Cash Balance

$20,000
$10,000
$0
($10,000)
Jan Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

Page 12

Safe Kids Child Care

7.4 Projected Balance Sheet
The following table presents the Balance Sheet for Safe Kids Child Care.
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

2001
$45,547
$0
$45,547

2002
$98,121
$0
$98,121

2003
$183,591
$0
$183,591

$0
$0
$0
$45,547

$0
$0
$0
$98,121

$0
$0
$0
$183,591

2001
$2,938
$0
$100
$3,038

2002
$5,771
$0
$100
$5,871

2003
$12,123
$0
$100
$12,223

$22,800
$25,838

$12,800
$18,671

$2,800
$15,023

$40,000
($3,000)
($17,291)
$19,709
$45,547
$19,709

$40,000
($20,291)
$59,742
$79,450
$98,121
$79,450

$40,000
$39,450
$89,117
$168,567
$183,591
$168,567

Liabilities and Capital

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 8351, Child Day Care Services, are shown for
comparison.

Page 13

Safe Kids Child Care

Table: Ratios
Ratio Analysis
2001
0.00%

2002
96.86%

2003
31.01%

Industry Profile
9.50%

0.00%
0.00%
0.00%
100.00%
0.00%
100.00%

0.00%
0.00%
0.00%
100.00%
0.00%
100.00%

0.00%
0.00%
0.00%
100.00%
0.00%
100.00%

16.20%
1.70%
26.80%
44.70%
55.30%
100.00%

0.22%
50.06%
50.06%
49.94%

0.10%
13.05%
13.05%
86.95%

0.05%
1.53%
1.53%
98.47%

31.80%
31.00%
62.80%
37.20%

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes

100.00%
97.02%
103.63%
0.00%
-5.61%

100.00%
96.89%
85.29%
0.00%
16.92%

100.00%
96.80%
83.59%
0.00%
18.98%

100.00%
0.00%
75.60%
0.70%
2.60%

Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets

14.99
14.99
56.73%
-87.73%
-37.96%

16.71
16.71
19.03%
107.42%
86.98%

15.02
15.02
8.18%
75.52%
69.34%

1.27
1.14
62.80%
5.40%
14.60%

Business Vitality Profile

Sales per Employee
Survival Rate

2001
$26,163

2002
$42,919

2003
$51,903

Industry
$0
0.00%

Additional Ratios
Net Profit Margin
Return on Equity

2001
-6.61%
-87.73%

2002
11.60%
75.19%

2003
13.21%
52.87%

0.00
0
0.00
93.65
3
5.74

0.00
0
0.00
77.62
43
5.25

0.00
0
0.00
47.03
69
3.68

n.a
n.a
n.a
n.a

1.31
0.12

0.24
0.31

0.09
0.81

n.a
n.a

$42,509
-5.63

$92,250
48.95

$171,367
164.22

n.a
n.a

0.17
7%
14.99
13.27
0.00

0.19
6%
16.71
6.48
0.00

0.27
7%
15.02
4.00
0.00

n.a
n.a
n.a
n.a
n.a

Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

n.a
n.a

n.a

Page 14

Appendix
Appendix Table: Sales Forecast
Sales Forecast
Unit Sales
Full-Time Child - Month
Drop-In Child - Hour
Other
Total Unit Sales

Jan
25
50
0
75

Feb
25
75
0
100

Mar
35
100
0
135

Apr
40
100
0
140

May
50
100
0
150

Jun
50
150
0
200

Jul
60
150
0
210

Aug
60
200
0
260

Sep
70
200
0
270

Oct
75
250
0
325

Nov
75
250
0
325

Dec
75
250
0
325

Unit Prices
Full-Time Child - Month
Drop-In Child - Hour
Other

Jan
$400.00
$3.00
$0.00

Feb
$400.00
$3.00
$0.00

Mar
$400.00
$3.00
$0.00

Apr
$400.00
$3.00
$0.00

May
$400.00
$3.00
$0.00

Jun
$400.00
$3.00
$0.00

Jul
$400.00
$3.00
$0.00

Aug
$400.00
$3.00
$0.00

Sep
$400.00
$3.00
$0.00

Oct
$400.00
$3.00
$0.00

Nov
$400.00
$3.00
$0.00

Dec
$400.00
$3.00
$0.00

Sales
Full-Time Child - Month
Drop-In Child - Hour
Other
Total Sales

$10,000
$150
$0
$10,150

$10,000
$225
$0
$10,225

$14,000
$300
$0
$14,300

$16,000
$300
$0
$16,300

$20,000
$300
$0
$20,300

$20,000
$450
$0
$20,450

$24,000
$450
$0
$24,450

$24,000
$600
$0
$24,600

$28,000
$600
$0
$28,600

$30,000
$750
$0
$30,750

$30,000
$750
$0
$30,750

$30,000
$750
$0
$30,750

Direct Unit Costs

Full-Time Child - Month
Drop-In Child - Hour
Other

Jan
$10.00
$0.75
$0.00

Feb
$10.00
$0.75
$0.00

Mar
$10.00
$0.75
$0.00

Apr
$10.00
$0.75
$0.00

May
$10.00
$0.75
$0.00

Jun
$10.00
$0.75
$0.00

Jul
$10.00
$0.75
$0.00

Aug
$10.00
$0.75
$0.00

Sep
$10.00
$0.75
$0.00

Oct
$10.00
$0.75
$0.00

Nov
$10.00
$0.75
$0.00

Dec
$10.00
$0.75
$0.00

Jan
$250
$38
$0
$288

Feb
$250
$56
$0
$306

Mar
$350
$75
$0
$425

Apr
$400
$75
$0
$475

May
$500
$75
$0
$575

Jun
$500
$113
$0
$613

Jul
$600
$113
$0
$713

Aug
$600
$150
$0
$750

Sep
$700
$150
$0
$850

Oct
$750
$188
$0
$938

Nov
$750
$188
$0
$938

Dec
$750
$188
$0
$938

Direct Cost of Sales

Full-Time Child - Month
Drop-In Child - Hour
Other
Subtotal Direct Cost of Sales

Page 1

Appendix
Appendix Table: Personnel
Personnel Plan
Managers (2)
Care Staff
Other
Total People
Total Payroll

Jan
$6,000
$8,000
$0
4
$14,000

Feb
$6,000
$8,000
$0
4
$14,000

Mar
$6,000
$8,000
$0
4
$14,000

Apr
$6,000
$8,000
$0
6
$14,000

May
$6,000
$8,000
$0
6
$14,000

Jun
$6,000
$12,000
$0
8
$18,000

Jul
$6,000
$12,000
$0
8
$18,000

Aug
$6,000
$12,000
$0
8
$18,000

Sep
$6,000
$14,000
$0
9
$20,000

Oct
$6,000
$16,000
$0
10
$22,000

Nov
$6,000
$16,000
$0
10
$22,000

Dec
$6,000
$16,000
$0
10
$22,000

Page 2

Appendix
Appendix Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
Calculated Totals
Payroll Expense
New Accounts Payable

Jan
1
10.00%
10.00%
30.00%
0.00%

Feb
2
10.00%
10.00%
30.00%
0.00%

Mar
3
10.00%
10.00%
30.00%
0.00%

Apr
4
10.00%
10.00%
30.00%
0.00%

May
5
10.00%
10.00%
30.00%
0.00%

Jun
6
10.00%
10.00%
30.00%
0.00%

Jul
7
10.00%
10.00%
30.00%
0.00%

Aug
8
10.00%
10.00%
30.00%
0.00%

Sep
9
10.00%
10.00%
30.00%
0.00%

Oct
10
10.00%
10.00%
30.00%
0.00%

Nov
11
10.00%
10.00%
30.00%
0.00%

Dec
12
10.00%
10.00%
30.00%
0.00%

$14,000
$18,604

$14,000
$18,617

$14,000
$18,719

$14,000
$18,760

$14,000
$18,845

$18,000
$23,474

$18,000
$23,560

$18,000
$23,589

$20,000
$25,975

$22,000
$28,349

$22,000
$28,344

$22,000
$28,340

Page 3

Appendix
Appendix Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses:
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Certifications & Inspections
Utilities
Insurance
Rent
Payroll Taxes
Other
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
Include Negative Taxes

15%

Jan
$10,150
$288
$0
-----------$288
$9,863
97.17%

Feb
$10,225
$306
$0
-----------$306
$9,919
97.00%

Mar
$14,300
$425
$0
-----------$425
$13,875
97.03%

Apr
$16,300
$475
$0
-----------$475
$15,825
97.09%

May
$20,300
$575
$0
-----------$575
$19,725
97.17%

Jun
$20,450
$613
$0
-----------$613
$19,838
97.00%

Jul
$24,450
$713
$0
-----------$713
$23,738
97.09%

Aug
$24,600
$750
$0
-----------$750
$23,850
96.95%

Sep
$28,600
$850
$0
-----------$850
$27,750
97.03%

Oct
$30,750
$938
$0
-----------$938
$29,813
96.95%

Nov
$30,750
$938
$0
-----------$938
$29,813
96.95%

Dec
$30,750
$938
$0
-----------$938
$29,813
96.95%

$14,000
$0
$0
$150
$200
$150
$250
$1,500
$2,100
$0
-----------$18,350
($8,488)
$245
$0
($8,733)
-86.03%

$14,000
$0
$0
$150
$200
$150
$250
$1,500
$2,100
$0
-----------$18,350
($8,431)
$240
$0
($8,671)
-84.80%

$14,000
$0
$0
$150
$200
$150
$250
$1,500
$2,100
$0
-----------$18,350
($4,475)
$235
$0
($4,710)
-32.94%

$14,000
$0
$0
$150
$200
$150
$250
$1,500
$2,100
$0
-----------$18,350
($2,525)
$230
$0
($2,755)
-16.90%

$14,000
$0
$0
$150
$200
$150
$250
$1,500
$2,100
$0
-----------$18,350
$1,375
$225
$0
$1,150
5.67%

$18,000
$0
$0
$150
$200
$150
$250
$1,500
$2,700
$0
-----------$22,950
($3,113)
$220
$0
($3,333)
-16.30%

$18,000
$0
$0
$150
$200
$150
$250
$1,500
$2,700
$0
-----------$22,950
$788
$215
$0
$573
2.34%

$18,000
$0
$0
$150
$200
$150
$250
$1,500
$2,700
$0
-----------$22,950
$900
$210
$0
$690
2.80%

$20,000
$0
$0
$150
$200
$150
$250
$1,500
$3,000
$0
-----------$25,250
$2,500
$205
$0
$2,295
8.02%

$22,000
$0
$0
$150
$200
$150
$250
$1,500
$3,300
$0
-----------$27,550
$2,263
$200
$0
$2,063
6.71%

$22,000
$0
$0
$150
$200
$150
$250
$1,500
$3,300
$0
-----------$27,550
$2,263
$195
$0
$2,068
6.72%

$22,000
$0
$0
$150
$200
$150
$250
$1,500
$3,300
$0
-----------$27,550
$2,263
$190
$0
$2,073
6.74%

Page 4

Appendix
Appendix Table: Cash Flow
Pro Forma Cash Flow

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Cash Received
Cash from Operations:
Cash Sales
Cash from Receivables
Subtotal Cash from Operations

$10,150
$0
$10,150

$10,225
$0
$10,225

$14,300
$0
$14,300

$16,300
$0
$16,300

$20,300
$0
$20,300

$20,450
$0
$20,450

$24,450
$0
$24,450

$24,600
$0
$24,600

$28,600
$0
$28,600

$30,750
$0
$30,750

$30,750
$0
$30,750

$30,750
$0
$30,750

Additional Cash Received

Non Operating (Other) Income
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received

$0
$100
$0
$0
$0
$0
$0
$0
$10,250

$0
$0
$0
$0
$0
$0
$0
$0
$10,225

$0
$0
$0
$0
$0
$0
$0
$0
$14,300

$0
$0
$0
$0
$0
$0
$0
$0
$16,300

$0
$0
$0
$0
$0
$0
$0
$0
$20,300

$0
$0
$0
$0
$0
$0
$0
$0
$20,450

$0
$0
$0
$0
$0
$0
$0
$0
$24,450

$0
$0
$0
$0
$0
$0
$0
$0
$24,600

$0
$0
$0
$0
$0
$0
$0
$0
$28,600

$0
$0
$0
$0
$0
$0
$0
$0
$30,750

$0
$0
$0
$0
$0
$0
$0
$0
$30,750

$0
$0
$0
$0
$0
$0
$0
$0
$30,750

Expenditures
Expenditures from Operations:
Cash Spending
Payment of Accounts Payable
Subtotal Spent on Operations

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

$278
$16,183
$16,462

$280
$18,605
$18,884

$291
$18,620
$18,911

$296
$18,720
$19,016

$305
$18,762
$19,067

$308
$23,446
$23,754

$318
$23,477
$23,795

$321
$23,561
$23,882

$331
$25,892
$26,222

$339
$28,277
$28,616

$338
$28,349
$28,687

$338
$28,344
$28,682

Additional Cash Spent

Non Operating (Other) Expense
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$0
$600
$0
$0
$0
$17,062

$0
$0
$0
$0
$600
$0
$0
$0
$19,484

$0
$0
$0
$0
$600
$0
$0
$0
$19,511

$0
$0
$0
$0
$600
$0
$0
$0
$19,616

$0
$0
$0
$0
$600
$0
$0
$0
$19,667

$0
$0
$0
$0
$600
$0
$0
$0
$24,354

$0
$0
$0
$0
$600
$0
$0
$0
$24,395

$0
$0
$0
$0
$600
$0
$0
$0
$24,482

$0
$0
$0
$0
$600
$0
$0
$0
$26,822

$0
$0
$0
$0
$600
$0
$0
$0
$29,216

$0
$0
$0
$0
$600
$0
$0
$0
$29,287

$0
$0
$0
$0
$600
$0
$0
$0
$29,282

Net Cash Flow

Cash Balance

($6,812)
$60,188

($9,259)
$50,929

($5,211)
$45,718

($3,316)
$42,402

$633
$43,035

($3,904)
$39,131

$55
$39,186

$118
$39,304

$1,778
$41,082

$1,534
$42,616

$1,463
$44,079

$1,468
$45,547

Page 5

Appendix
Appendix Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

Starting Balances
$67,000
$0
$67,000

Jan
$60,188
$0
$60,188

Feb
$50,929
$0
$50,929

Mar
$45,718
$0
$45,718

Apr
$42,402
$0
$42,402

May
$43,035
$0
$43,035

Jun
$39,131
$0
$39,131

Jul
$39,186
$0
$39,186

Aug
$39,304
$0
$39,304

Sep
$41,082
$0
$41,082

Oct
$42,616
$0
$42,616

Nov
$44,079
$0
$44,079

Dec
$45,547
$0
$45,547

$0
$0
$0
$67,000

$0
$0
$0
$60,188

$0
$0
$0
$50,929

$0
$0
$0
$45,718

$0
$0
$0
$42,402

$0
$0
$0
$43,035

$0
$0
$0
$39,131

$0
$0
$0
$39,186

$0
$0
$0
$39,304

$0
$0
$0
$41,082

$0
$0
$0
$42,616

$0
$0
$0
$44,079

$0
$0
$0
$45,547

$0
$0
$0
$0

Jan
$2,421
$0
$100
$2,521

Feb
$2,433
$0
$100
$2,533

Mar
$2,532
$0
$100
$2,632

Apr
$2,571
$0
$100
$2,671

May
$2,654
$0
$100
$2,754

Jun
$2,682
$0
$100
$2,782

Jul
$2,764
$0
$100
$2,864

Aug
$2,793
$0
$100
$2,893

Sep
$2,875
$0
$100
$2,975

Oct
$2,947
$0
$100
$3,047

Nov
$2,943
$0
$100
$3,043

Dec
$2,938
$0
$100
$3,038

Long-term Liabilities
Total Liabilities

$30,000
$30,000

$29,400
$31,921

$28,800
$31,333

$28,200
$30,832

$27,600
$30,271

$27,000
$29,754

$26,400
$29,182

$25,800
$28,664

$25,200
$28,093

$24,600
$27,575

$24,000
$27,047

$23,400
$26,443

$22,800
$25,838

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

$40,000
($3,000)
$0
$37,000
$67,000
$37,000

$40,000
($3,000)
($8,733)
$28,268
$60,188
$28,268

$40,000
($3,000)
($17,404)
$19,596
$50,929
$19,596

$40,000
($3,000)
($22,114)
$14,886
$45,718
$14,886

$40,000
($3,000)
($24,869)
$12,131
$42,402
$12,131

$40,000
($3,000)
($23,719)
$13,281
$43,035
$13,281

$40,000
($3,000)
($27,051)
$9,949
$39,131
$9,949

$40,000
($3,000)
($26,479)
$10,521
$39,186
$10,521

$40,000
($3,000)
($25,789)
$11,211
$39,304
$11,211

$40,000
($3,000)
($23,494)
$13,506
$41,082
$13,506

$40,000
($3,000)
($21,431)
$15,569
$42,616
$15,569

$40,000
($3,000)
($19,364)
$17,636
$44,079
$17,636

$40,000
($3,000)
($17,291)
$19,709
$45,547
$19,709

Liabilities and Capital

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

Page 6