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Pre-Feasibility Report Kids Day Care Center

Pre-Feasibility Report
Kids Day Care Center

Lubna Siddique
Anjum Rauf

Date: January 15, 2013

Pre-Feasibility Report Kids Day Care Center

Index
Executive Summary ........................................................................................................................ 3
Objectives: - ................................................................................................................................ 3
Ownership of Business: - ................................................................................................................ 3
The Management Team .................................................................................................................. 3
The Market ...................................................................................................................................... 4
Keys to Success............................................................................................................................... 4
The Customers ................................................................................................................................ 4
Start-up Summary ........................................................................................................................... 5
Start-up Requirements .................................................................................................................... 6
Human Resource Required ............................................................................................................. 7
Fixed Assets .................................................................................................................................... 8
First Six Months Running Expenses ............................................................................................... 8
Financial Sources Available ........................................................................................................... 9
Projected Target Sales................................................................................................................... 10
Projected Income Statement: - ...................................................................................................... 11
Projected Cash Flow ..................................................................................................................... 12
Legal Requirements ...................................................................................................................... 13

Pre-Feasibility Report Kids Day Care Center

Executive Summary
Kids Day Care Center have planned to day care services to London and surrounding of our day
care center. This proposed mid-sized child care facility will serve children from three months to
six years of age. Our services will be safe and secure, providing the parents with an excellent
place where their children can be taken care of.

Objectives: Our objectives for the five years of operation include:

To look after children and extra care that parents are satisfied from our services.
To put extra effort to keep the children happy and grow healthy at our Day Care Center.
To provide services at superior level and at an affordable price.
To provide customer service that is second to non.

Ownership of Business: We planned to run the proposed project as partnership business which consists of following
partners. Details of partnership and investment are as follows.

S. No

Partner Name

Designation

01
02

Lubna Siddique
Anjum Rauf

Director
Director

Total Investment

Share %

Amount ()

50%
50%

100,000.00
100,000.00

200,000.00

The Management Team


Kids Day Care Center will be lead by team of two Directors, Lubna Siddique and Anjum Rauf.
Anjum Rauf has a sales, marketing, and management background within the industry and
secondly Lubna Siddique who is Doctor by profession and was running a Nursing Home in
Pakistan. Lubna Siddique has experience of administration and child look after because she is
child specialist.

Pre-Feasibility Report Kids Day Care Center

The Market
The child care market is quite competitive in the London area. There are over 200 different
facilities. There are two general types of facilities. The larger style is commercially run, typically
a corporate franchise center. 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. Kids Day Care Center will employ two
strategies to differentiate themselves. The first is a pricing structure where Kids' Day Care
Center 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. Kids Day Care Center 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.

Keys to Success
Keys to success for our business will include:
1.
2.
3.
4.

Maintaining a reputable and untarnished reputation in the community.


Quality care.
Competitive pricing.
Flexible hours

The Customers
Kids Day Care Center will be concentrating on two different target customer segments.
A. Full Time Working Couples: The first is full-time working couples. This group is forecasted to account for 80% of our
business. This group is growing at a rate of 25%.

B. Drop in Customers
The second group of customers are drop in, customers who will use Kids Day Care Center
sporadically, whenever the need arises. This group is growing at 20%.

Pre-Feasibility Report Kids Day Care Center

Start-up Summary
Kids Day Care Center needs to take following steps at start up which includes: -

S. No.
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15

Startup Actions
Takeover of running House in area of London on Rent.
Pay Six Months Rent
Registering NI Number
Registration with HMRC Dept
Partnership Registration
Registering with Health & Safety Department
Registering with FSA (Food and Safety Agency)
Purchase of Centers furnitures and fixture, Two land-line phones, fax machine
DSL broadband Internet connection.
Getting website developed for our online presence of our business
Marketing fees, accounting fees, trade association dues
The marketing fees are the costs associated and advertisement in newspapers,
brochures and Interactive Website.
Cost of rent will be .12,000/Annually and .1,000/- per month (as per rent details
given in Ad of our proposed house on rent.
The legal fees are for corporate formation and the generation and review of
contracts.
The accounting fees for licenses and formation of business and maintaining of
account for tax purpose.

Pre-Feasibility Report Kids Day Care Center

Start-up Requirements
Start-up Requirements
Start-up Expenses
Legal
Brochures
Stationery etc.
Activity Supplies
Food Preparation Supplies
Crockery to Purchase
First Aid Supplies
Cleaning Supplies
Nap Time Bedding
Other
Rent One Year
Fixed Assets as per following list
Total Start-up Expenses
Start-up Assets
Working Capital in Hand
Total Assets
Total Requirements

1,000.00
500.00
200.00
500.00
400.00
2000.00
200.00
150.00
250.00
400.00
12,000.00
17,860.00
35,460.00
164,540.00
200,000.00
200,000.00

Pre-Feasibility Report Kids Day Care Center

Human Resource Required


Currently 15 Children are being look after in Day Care Center. But it is registered for 28
Children. So requirement of human resource for current number of children is as follows: Designation

Number

Salary ()

Annually ()

Lubna Siddique

Anjum Rauf

Baby Sitter

2*1,000

2,000.00

24,000.00

Qualified Teacher (Part


Time)

1*1,000

1,000.00

12,000.00

Cook

1*1000

1,000.00

12,000.00

4,000.00

48,000.00

Total Annual Salary

Pre-Feasibility Report Kids Day Care Center

Fixed Assets
Fixed Assets
Item Details
Two Officer Chairs
Two Officer Desk
Seats for Customers & Convenience
Shop
Air Conditioner Split Units (6 Ton)
Hot Water Geyser Large
Office Shelves
Baby Carts
Ten Computers with Software &
Games
Toys
Total Cost Furniture & Fixture

Per Unit
60.00
220.00
30.00

Quantity
2
2
10

1,650.00
250.00
120.00
100.00
700.00

2
1
10
12
10

Cost in GBP
120.00
440.00
300.00
3,350.00
250.00
1,200.00
1,200.00
7,000.00
4,000.00
17,860.00

First Six Months Running Expenses


Six Months Running Expense
Legal
Promotion
Stationery etc.
Activity Supplies
Food Preparation Supplies for 15 Children
First Aid Supplies
Cleaning Supplies
Nap Time Bedding
Other
Rent One Year

1,000.00
3000.00
500.00
1000.00
5000.00
600.00
600.00
1500.00
1000.00
12,000.00

Salaries Six Months

24,000.00
4,800.00
55,000.00

Utility Bills Electricity 300, Gas 300, Tel 100, Water 100
Total Six Month Running Expenses

Pre-Feasibility Report Kids Day Care Center

Financial Sources Available


Capital Invested by Lubna Siddique
Capital Invested by Anjum Rauf
Total available Funds

.100,000.00
.100,000.00
.200,000.00

Start Costs
Required for Setting Up Business

.35,460.00

Available Working Capital


Total

.164,540.00
.200,000.00

Pre-Feasibility Report Kids Day Care Center

Projected Target Sales


Cash flow is based on real sales currently generated by proposed Day Care Center Yorkshire.
We have targeted to increase sales by 10% every year.
Targeted Sales
Year
1
2
3
4
5

Target Sales
Increase
131,750.00
158,100.00
20%
189,720.00
20%
227,664.00
20%
273,196.80
20%

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Pre-Feasibility Report Kids Day Care Center

Projected Income Statement: Projected Income Statement


(GBP)
Revenue from Targeted Sales
Net Sales
Cost of Goods Sold
Raw Material Cost
Activity Supplies
Total Cost of Goods Sold
Gross Profit
General Administrative & Selling
Expenses
Salaries
Utilities Bills Electricity 300, Gas 300,
Tel 100, Water 100

Rent
First Aid Supplies
Cleaning Supplies
Baby Nap Supplies
Legal Expense
Stationary
Depreciation
Consultancy + Web Development
Insurance
Promotional Expense
Total Administrative Expenses
Net Profit Before Tax
Tax according to HMRC Tax Rates
for Employer
Net Profit After Tax
Monthly Profit After Tax

Year 1
131,750.00

Year - 2
158,100.00

Year - 3
189,720.00

131,750.00

158,100.00

189,720.00

10,000.00
2,000.00
12,000.00
119,750.00

11,000.00
2,040.00
13,040.00
145,060.00

12,100.00
2,080.80
14,180.80
175,539.20

Year 1
48,000.00

Year - 2
50,400.00

Year - 3
52,920.00

9,600.00
12,000.00
1,200.00
1,200.00
2,000.00
1,000.00
1,000.00
1,000.00
1,500.00
800.00
6,000.00
85,300.00
34,450.00

9,888.00
12,600.00
1,224.00
1,224.00
2,040.00
1,050.00
1,050.00
1,000.00
1,575.00
800.00
6,300.00
89,151.00
55,909.00

10,184.64
13,230.00
1,248.48
1,248.48
2,080.80
1,102.50
1,102.50
1,000.00
1,653.75
800.00
6,615.00
93,186.15
82,353.05

5,269.00
29,181.00
2,431.75

13,868.60
42,040.40
3,503.37

24,446.22
57,906.83
4,825.57

Percentage
Increase
20%

Percentage
Increase
5%
3%
5%
2%
2%
2%
5%
5%
3%
5%
5%

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Pre-Feasibility Report Kids Day Care Center

Projected Cash Flow


CASH FLOW STATEMENT FOR THREE YEAR
Cash Flow Statement
Cash in Hand at Starup
Revenue from Targeted Sales
Cash avaiable for Expenses

Year - 1
200,000.00
131,750.00
331,750.00

Year - 2
122,321.00
158,100.00
280,421.00

Year - 3
135,561.40
189,720.00
325,281.40

Rent
First Aid Supplies
Cleaning Supplies
Baby Nap Supplies
Legal Expense
Stationary
Depreciation
Consultancy + Web Development
Insurance
Promotional Expense

10,000.00
2,000.00
48,000.00
9,600.00
12,000.00
1,200.00
1,200.00
2,000.00
1,000.00
1,000.00
1,000.00
1,500.00
800.00
6,000.00

11,000.00
2,040.00
50,400.00
9,888.00
12,600.00
1,224.00
1,224.00
2,040.00
1,050.00
1,050.00
1,000.00
1,575.00
800.00
6,300.00

12,100.00
2,080.80
52,920.00
10,184.64
13,230.00
1,248.48
1,248.48
2,080.80
1,102.50
1,102.50
1,000.00
1,653.75
800.00
6,615.00

Total Direct and Indirect Expense


Restaurant on Lease
Fixed Assets
Plus Tax Paid

97,300.00
65,000.00
17,860.00
5,269.00

102,191.00
13,868.60

107,366.95
24,446.22

Total Cash Out Flow


Cash in Hand After all Expenses

185,429.00
146,321.00

116,059.60
164,361.40

131,813.17
193,468.23

Less Drawing Hina Afzal


Less Drawing Abdul Rehman
Net Cash Flow at End of Year

12,000.00
12,000.00
122,321.00

14,400.00
14,400.00
135,561.40

18,000.00
18,000.00
157,468.23

Cost of Goods Sold


Raw Material Cost
Activity Supplies
Salaries
Utilities Bills Electricity 300, Gas 300, Tel 100, Water 100

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Pre-Feasibility Report Kids Day Care Center

Legal Requirements
1.
2.
3.
4.
5.
6.

Registering business for NI Number (National Insurance Number)


Registering Partnership Business
Registering business with HMRC department for taxation
Registering Business with the Environmental Health Service
Registering with Ofsted (Office for Standard in Education)
Registering Business with FSA (Food and Safety Agency)

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