2. Team C - Business Plan
Keller Graduate School of Management
Combined Capstone Project
Professor Anthony Shotwell
August 25, 2015

3. Agenda and Introductions
Business Concept
John Dawson, President and VP of Finance
Marketing Plan
Senda Brahmi, VP of Marketing
Operations Plan
Bernard Isiko, VP of Operations
Human Resources Plan
Mitra Khiabanian, VP of Human Resources
Information Technology Plan
Vic Melkonian, VP of Information Technology
Financial Plan
John Dawson, President and VP of Finance
John

4. The Executive Team
John

5. Business Concept
John Dawson, President and VP of Finance
John

6. 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

7. 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

8. Industry Overview
Source: http://www.census.gov/how/infographics/sources.html John

9. 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

10. 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

11. Industry Trends
Source: Average net profit margin for child day care businesses in Sageworks’ database John

12. Survey Results (Sample)
John
 Survey Demographic: Random to West L.A. parents
 Sample Size: 1000
 Response Size: 70

13. Senda
Marketing Plan
Senda Brahmi, VP of Marketing

14.  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

15. Target Market
Senda
http://www.weho.org/home/showdocument?id=13481

16. http://www.weho.org/home/showdocument?id=13188 Senda
Target Market

17. 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

18. Marketing Mix Strategy
Senda
PLACE
West Hollywood/
Internet
PROMOTIO
N
Social Media,
Flyers, LA Times
PRICE
$1,250 Monthly
PRODUCT
Daycare Center &
Mobile App

19. Senda
Competition
Hollywood Little Red School
Doheny School

20. 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

21. SWOT Analysis
Strengths
- 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

22. Operations Plan
Bernard Isiko, VP of Operations
Bernard

23. Operations Plan
 Location
 Office Operations
 Regional Map
 Street View of Location
 Floor Plan Layout
 Licensing and Permits
Bernard

24. Location
7110 Santa Monica Blvd.,
West Hollywood, CA 90046
Space: 14,000 SF
Hours of Operation:
Monday – Friday
6:00AM – 7:00PM
Maximum capacity of children: 80
Bernard

25. Map
Bernard

26. Front View of Location
Bernard

27. Outdoor Playgrounds
Bernard

28. Floor Plan
Bernard

29. Daily Schedule
Bernard

30. 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

31. Human Resource Management
Mitra Khiabanian, VP of Human Resources
Mitra

32. Strategic Human Resource Management
 Company Structure
 Recruitment
 Strategic Staffing
 Retention
 Competitive Advantage
 Training and Development
Mitra

33. Company Structure
Chief Executive Officer
Operations
Information
Technology
Human
Resources
Mitra
Finance Marketing

34. Recruitment
Mitra

35. Strategic Staffing
 Resources: Referrals and LinkedIn
 Depending on the position, 0-2 years education
and experience
 Conduct background check and screening
Mitra

36.  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

37. Competitive Advantage
Mitra
Competing Through Sustainability and Technology
Kids &
Parents
Shareholders
Employees

38. Training and Development
Mitra
E-learningWhy 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

39. Number of Students 20 40 60 80
Salary 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

40. Information Technology Plan
Vic Melkonian, VP of Information Technology
Vic

41. Information Technology Plan
 Product Overview
 Student Tools
 Onsite Security
Vic

42. Product Overview
 Web site: www.ladybugdaycare.com
 Web application
 Mobile app, patent pending
 Biometric attendance
 Encrypted student enrollment database with
cloud replication
Vic

43. Web Site www.ladybugdaycare.com
Vic

44. Mobile App Ladybug Mobile App
Vic

45. Process Flow Diagram
Vic

46. Student Tools
A 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

47. Onsite Security
Security 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

48. Financial Plan
John Dawson, President and VP of Finance
John

49. 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

50. Statement of Assumptions
John
Tuition: $1,250 per month
Annual Revenue: $1,250,000
Annual Expenses: $925,000
Student Capacity:
80 by the end of the fourth month

51. 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

52. 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 584,000
Contingency (15%) 88,000
Total Financing Cost 672,000

53. 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

54. 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

55. Income Statement
12 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)

56. Income Statement
5 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
Expenses
Building 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

57. Balance Sheet
5 Years Ended December 31st, 2020
John
2016 2017 2018 2019 2020
Assets
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
Liabilities
Loan 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 WORTH
Stockholders' 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

58. Statement of Cash Flows
5 Years Ended December 31, 2020
John
2016 2017 2018 2019 2020
CASH RECEIPTS
Income 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 DISBURSEMENTS
Expenses
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 FLOW
Operating 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

59. 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 Equity
Net Income/Shareholder's Equity
Net Income 1,471,204
Shareholder's Equity 418,124
ROE 3.52

60. Exit Strategy
John
Estimated Value After 5 Years $1,471,204
75% founder's share $1,103,403
25% 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.

61. Thank You!