Like the marketing program, your management system will help set the foundation and ultimate plan for your business. Planning and developing a program that adequately manages your center is very important. There are many factors that you must consider, such as

• finding and hiring qualified staff,
• how many staff members will be needed,
• what hours will they work,
• what will be their responsibilities, and
• what salaries and fringe benefits will you offer personnel.

Since it is unlikely that you will have all the skills needed to effectively manage your center, you will have to hire staff and personnel to supplement those skills you lack. Your staff is a reflection of your program philosophy and goals. Its quality and performance are critical to the success of your center. Many factors will influence your decision regarding the best staff to hire for your center. Some of these points have been discussed in earlier sections. They include:

• Your own goals and objectives (what you intend to do and how you will go about doing it)
• Licensing regulations concerning staff-child ratios and group size.
• Needs assessment which assisted you in determining the age group of the children to be cared for and what kinds of experiences parents wish for their children.

Other factors will also influence your decisions. Listed below are five questions that you must answer to adequately staff your center with well-qualified personnel. Each question includes a brief description that will help you make your decision.

• How many staff will you need? State licensing regulations establish minimum guidelines for the number of staff you will need depending on the age group of the children you will care for in the center. These reflect the minimum requirements but you may choose to require more. Research has shown that for 3-5 year olds, small groups of 14-18 children are important to quality. Infants will be in much smaller groups than that, and school-age children may be in slightly larger groups. In addition to your regular staff (those caring for the children), you will need to make decisions regarding other personnel who, although not working directly with the children, may be necessary to maintain a smooth operating center (i.e., cook, if you are preparing food at the center, a secretary, bookkeeper (or combination of both) and a custodian). Substitute staff will be necessary for those days regular staff and volunteers are ill, on vacation, or in training. The number of staff you need will depend on the number of children you plan to care for, state licensing regulations and the quality of the program you plan to provide. Remember, the more qualified your staff, the better your program will be in meeting the needs of the parents and the children.
• What hours will they work? When deciding on the number of staff needed, also account for the hours they will work at the center. Most centers are open 10 to 12 hours daily. However, the kind of service you plan to provide will determine how long your center will need to be open. Know that working with children is emotionally and physically demanding. Staff tend to be less effective after six hours. If you cannot afford eight hour shifts, staff should be given breaks. If you require eight hour shifts, then staff are entitled, by law, to lunch breaks and coffee breaks, usually once in the morning and once in the afternoon. Developing a staff schedule depends on how many children are present during different times of the day. Children do not all come or leave at the same time. So the number of staff will depend on the number of children present at any one time.
• What will their responsibilities be? Determining responsibilities depends on who will do what (description of the job), the authority each person has in line with their responsibilities, who will supervise whom and how it will be determined whether they have met those responsibilities. Job descriptions must be written for all staff members including yourself. Also, determine the minimum employment requirement for each position under consideration, and if you will require a degree or credential experience or special training. To help you with the above tasks (which is known as developing a job description) contact:
  • your licensing agent,
  • director of another child care center,
  • agencies that assist people in funding work by helping them in determining their skills, i.e., Displaced Homemakers, Urban League, YWCAs;
  • child care resource and information referral centers,
  • child care associations, and
  • references in the bibliography located in Appendix D.
    
• What salaries and fringe benefits will you offer? To help ensure that you offer quality care for the children enrolled in your center, you must maintain a consistent, qualified staff. Salaries should reflect a competitive wage level that will attract competent, qualified people. In addition, serious consideration should be given to an attractive fringe benefit program.
• Some fringe benefits to consider are:
  • social security (optional for non-profit)
  • health insurance
  • workmen's compensation (mandatory)
  • vacation leave
  • sick leave
  • personal leave
  • paid maternity/paternity leave
  • paid staff training to workshops, conferences or providing money for college credits
  • retirement plan
  • professional days.
  The same resources available to help you with job descriptions also will help you make decisions concerning salaries and fringe benefits.

When all the above are accomplished, then further decisions must be made regarding:

• Personnel Policies. A written personnel policy is your outline of operating procedures for staff. It specifically details what they can expect and what is available to them as employees of your center. Clearly stated, policies help avoid future misunderstandings and misinterpretations. Personnel policies generally include:
  • job descriptions
  • salary ranges, from lowest level to highest level for any one position
  • benefits
  • hiring and termination procedures · evaluation procedure · grievance procedure
  • sick and vacation leave.
• Legal Aspects. You have to become familiar with many laws when others are working for you. Some of the laws include:
  • Withholding Tax (Federal Income Tax)--check with IRS.
  • State or Municipal Income Tax--ask your bank who to contact.
  • Workmen's Compensation--contact State Workmen's Compensation Agency or State Insurance Company.
  • Social Security (FICA)--contact local Social Security office.
  • Unemployment Insurance--contact State Employment Security Agency.

  These laws and regulations constantly change so it is important to keep abreast of them. For more information, contact IRS or a lawyer.

• Hiring Process. The final step in preparation for hiring staff is to establish hiring procedures. If you used a parent group in assisting you with your needs assessments, you might want to include them when hiring. They can offer invaluable advice on hiring qualified staff which will satisfy your needs and those of the parents. Some steps to include in hiring procedures are:
  • Establish criteria for selecting your staff. Work with children involves planning a curriculum which provides activities that will enhance their social, intellectual, emotional and physical development. Major considerations are the personal qualities and the candidate's attitude toward childcare, children and parents. Criteria also should be based on qualities and skills necessary to fulfill the job description.
  • Establish a time frame. Remember, you will need to advertise, interview and make selections (some individuals may have to give notice to present employers, so it is wise to begin the hiring process 60 days in advance).
  • Advertise.
  • Review resumes based on your criteria.
  • Telephone those applicants you may wish to hire for an interview.
  • Screen to be sure they meet your criteria.
  • Have candidates fill out application forms.
  • Conduct interviews (if possible, observe candidate with children).
  • Contact references.
  • Review and make your decision.
  • Notify candidates of every decision. Even those you do not hire need to know your decision.
• Where do you look for staff? You may find the following places helpful as you begin to recruit staff.
  • Teachers
  • College placement Offices
  • Vocational High School.
  • State Licensing Office
  • Information & Referral Agency
  • Local Employment Agency
  • Advertise in Paper (nearest city paper)
  • Local Business School
  • Notices in Markets and Laundromats.

  Each advertisement should include a job title, brief job description, qualifications, deadline for applications, request for resume, telephone number or address and whom to contact.

  You will probably notice that staff salaries and fringe benefits consume a major portion of your budget. In addition to some paid staff, many centers use volunteers to meet licensing requirements. Volunteers can offer special activities that centers could not otherwise afford to give children and their families, such as dance or gymnastics. If you decide to use volunteers, be very specific when they will work. Describe their duties, so they know to whom they are to report, and the person to notify in case of an absence from the center. Remember, there are risks in using volunteers to maintain your staff-child ratio. If the volunteer does not show up, you could be in violation of state regulations. Volunteers can serve as teachers, teacher-aides, secretaries and bookkeepers. Many volunteers are skilled in story-telling, dance, art and music. Parents of the children may have skills in nursing, accounting, law and many may want to serve as volunteers to work to reduce their tuition fees. Volunteers may be found at:

  • Colleges and universities [student teachers, students in art, music, athletics).
  • Fraternities/Sororities.
  • Girl Scouts/Boy Scouts.
  • Junior League.
  • Foster Grandparent Programs.
  • Senior citizens groups.
  • Church organizations.
  • Armed Forces bases.
  • Training programs.

Return to Childcare Module Table of Contents

DEVELOPING A BUSINESS PLAN

By now, you will have the pieces to create a professional business plan. A business plan is a great tool for preparing to go into business, and it is necessary to apply for a business loan. It describes your business, how it is managed, and how it is marketed. It also describes the financial performance that you expect from the business.

• Complete A Professional Business Plan
  • Start with your name, address, business name, and the date.
  • Complete the following information:
    • Briefly describe your business. Include services offered, years in business, location and history.
    • Describe your background. How did it prepare you to operate your business successfully? Include your experience, education and training, credentials and professional association memberships.
    • Describe your market. Discuss local demand for child care services. How does your business serve identified daycare needs?
    • Describe your "typical" customer.
    • Describe other child care services in your area. What makes you different?
    • Describe your marketing strategies. Attach samples of marketing materials.
    • Describe your current record keeping process and business policies and contracts. How do these support the profitability of your business?
    • Describe your business' profitability. Is it profitable, breaking even, or losing money? Why is it in this position, and, if you are losing money, what is your plan for turning the business around?
    • What will your income be for the next 12 months? Does your business have adequate cash flow to cover all expenses and to meet your profit goals? (Attach your most recent Cash Flow Plan and Break-Even Analysis)

 If you are completing a business plan for the purpose of obtaining finances for your business, be sure to include the following items as a supplement to your plan:

• How much do you need to borrow?
• What is the money for (i.e. operating expense, equipment purchase or repair, debt refinance)?
• What personal financial contribution have you, or will you, make to this business?
• List the collateral you have available to secure the loan and its current value.
• Attach a copy of your most recent federal income tax return.

Contact your local Child Care Resource & Referral agency or Small Business Development Center for assistance in preparing your business plan.

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Business Plan Outline for Child Care Centers

Cover Sheet: 



Name, Address and Phone Number of Business

Names of Principals

STATEMENT OF PURPOSE:

Table of Contents

I.  The Business
    A.  Description of the Business

    B.  Location of Business

    C.  Competition and Feasibility Study

    D.  Operating Procedures and Policies

    E.  Personnel

    F.  Business Insurance

    G.  Financial Data
II.  Financial Data        
    A.  Fundraising report and/or application for loan

    B.  Capital Equipment and Supply List

    C.  Balance Sheet

    D.  Break-even Analysis

    E.  Pro-Forma Income Projections (Profit & Loss Statement) 

        3 yr summary - Detail by month, first year;

        Detail by quarter, second and third years;

        Assumptions upon which projections were based

    F.  Pro-Forma Cash Flow - Follow guidelines for letter E.

Supporting Documents

Tax returns of principals for last three years

Personal Financial Statement (all banks have these forms)

Information on family day care home location

Copy of contractors' renovation estimates

Copy of licenses or other legal documents

Copies of Resumes of all Principals

Copies of reference letters and/or letters of intent: suppliers, etc.

Copy of curriculum