Childcare Business Plan

Executive Summary

Overview:  We are a community of educators who have left a legacy of self-assured children who have progressed to higher education built on a foundation of the play. Our education team at Celebree School comprises specialists passionate about early childhood development because we are dedicated to safeguarding, teaching, and nurturing the children in our care. This implies that the proprietors of local child learning centers are present and engaged. It’s not a job; it’s a passion to educate and care for children.

Mission:  Our mission is to create a safe, stable learning environment where students may build a strong foundation for lifetime achievement.

Vision: Our vision is to be the industry leader in delivering exceptional care for newborns, toddlers, preschoolers, and school-aged children.

Industry Overview: Working families benefit from the child care sector since it offers daycare for newborns and children and preschool training to prepare them for kindergarten. There are two types of daycares in the industry: center-based and at-home. The most considerable industry income comes from center-based daycares, typically more significant in size and enrollment. Because the staff-to-child ratio restricts them, home daycare providers often employ just one primary caregiver (a non-employer). As a result, their registration is substantially lower. Before the epidemic, industry operators had consistently increased yearly income. However, most daycare facilities were compelled to close and temporarily lose revenue due to fears about infection. Domestic, commercial activity has resumed as mass vaccination campaigns continue across the United States. Many states have relaxed or eliminated health and safety regulations like mask requirements and indoor capacity limitations. Local and state legislative responses to restarting commercial activity will directly impact industry revival.

Financial Overview:

Financial Highlights:

Liquidity	2020A	2021A	2022F	2023F	2024F
Current ratio	6	12	23	32	42
Quick ratio	6	11	22	31	40
DSO	8	8	8	8	8
Solvency
Interest coverage ratio			8.2	11.1	14.2
Debt to asset ratio	0.01	0.01	0.2	0.18	0.16
Profitability
Gross profit margin	51%	51%	53%	53%	53%
EBITDA margin	12%	14%	21%	22%	22%
Return on asset	5%	6%	13%	14%	14%
Return on equity	5%	6%	16%	17%	17%

Fund Usage

Industry Analysis

In 2019, the US child care market was valued at USD 54.3 billion, and it is expected to grow at a CAGR of 3.9 percent between 2020 and 2027. The market is likely to be driven by a rise in working parents and childcare needs. According to a poll performed by the Center for American Progress, around 2.0 million parents had to forgo their careers in 2016 owing to childcare-related issues. There is a growing understanding of the relationship between economic development, parental employment, and child care access, which is predicted to improve the availability of low-cost child care facilities. Child care costs account for a large portion of a family’s budget, according to the Child Care Aware of America study ‘Parents and the High Cost of Child Care’ published in 2019. To address this issue, the Child Care Development Block Grant (CCDBG) received USD 5.3 billion in increased financing in 2019. Over the projected period, the growing trend of businesses providing onsite or nearby childcare services for their workers is likely to boost the market growth. Early childhood educators take the steps required to guarantee that all children get an adequate education. Parma City Schools launched Kindergarten Launch Academy in May 2020, a program that focuses on problem-solving, core reading, numeracy abilities, and social and emotional development to prepare younger children for kindergarten.

In 2019, the early education and childcare sector led the child care market in the United States, accounting for the most revenue. Due to an increase in the number of childcare and early education establishments. In 2019, over 1.4 million and 3.7 million pupils were enrolled in prekindergarten and kindergarten, indicating that the demand for early education is outpacing the supply.

Furthermore, the provision of at-home childcare services assists in alleviating the daycare deficit. The Fab Lab launched a virtual child care exhibition in March 2020, and the ‘Rain the Growth Agency’ supported it. A live daily virtual child care show in the form of a supplemental educational program is included in the show, which provides for storytime, fitness exercises, and snack suggestions.

In 2019, organized care facilities dominated the market, accounting for the most revenue. In addition, from 2020 to 2027, the category is predicted to increase at the quickest pace. The class is likely to be driven by increased working parents and the need for childcare services. Over the projection period, the home-based settings market is expected to increase significantly.

The market is defined by rising demand for child care centers, government policies, and service providers’ expansion plans. Some of the issues parents experience when selecting child care services include the quality of care and the availability of slots. As a result, service providers turn to technology to help parents choose child care. Bright Horizons introduced a smartphone app in June 2018 that allows parents to make backup care bookings when regular care is unavailable. In the United States, the continuing COVID-19 epidemic has primarily impacted child care. However, following a brief interruption, several service providers are restarting operations. According to Procare Solutions, a vendor of childcare management software, roughly 46.0 percent of the 61.0 percent of childcare facilities that closed in March returned in June 2020 after receiving approval from the majority of states. In June 2020, Amazon announced that 650,000 part-time and full-time Whole Foods Market and Amazon workers would be eligible for family care benefits via Care.com. Until January 2021, every employee will be eligible for subsidized emergency child care for up to ten days.

In 2019, organized care facilities dominated the market, accounting for the most revenue. In addition, from 2020 to 2027, the category is predicted to increase at the quickest pace. The need for childcare services and growth in the number of working parents are anticipated to boost the variety. The market for home-based settings is predicted to grow considerably throughout the forecast period. The market is defined by rising demand for child care centers, government policies, and service providers’ expansion plans. Some of the issues parents experience when selecting child care services include the quality of care and the availability of slots. As a result, service providers turn to technology to help parents choose child care. Bright Horizons introduced a smartphone app in June 2018 that allows parents to make backup care bookings when regular care is unavailable. Early childhood educators take the necessary steps to guarantee that all children get a high-quality education. Parma City Schools will launch Kindergarten Launch Academy in May 2020, emphasizing problem-solving, core reading, numeracy abilities, and social and emotional development to prepare children for kindergarten.