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    4 Replies Latest reply on Aug 18, 2008 9:39 AM by Yardbird

    I need Help!!

    jeta_20 Newbie

      Hello,

      My name is Rachel and for years I have been proposing the idea of starting my own Child Care facility. Now as a mom of four beautiful children, that dream is all I can think about everyday. I have 3 daycare age children and one school age child, I work full-time and I am in school full- time and just do not have the time to spend with my children anymore. My schedule is so hectic and this is making my decision of starting this daycare a reality.

      My issues are:
      1. I am not sure if I should start my own daycare from scratch or to possibly start a franchised brand.
      2. Where to start? I am working on my business plan now.
      3. I do not have any liquid assets or a way to start this business.

      I have been searching for possible ways to try and fund my Ideas and just keep coming to a dead end. I have searched The SBA website for Ideas. I have also been trying to find Grants to help out with some of the costs.

      Since I live basically pay check to paycheck, I feel as though my dream of being with my children and helping other families with an on point and quality day care for there loved ones, is only that a "Dream".

      Please help.
        • Re: I need Help!!
          LUCKIEST Guide
          I need Help!! Welcome Rachel

          Yes I can help. Tell me more. Where are you?? How soon do you want to start your
          own Child Care Facility??

          You start with a Business Name and a Business Plan.

          You can email me at pdeig@juno.com Please include a phone number.

          LUCKIEST
          • Re: I need Help!!
            A_Ellicott Adventurer
            Please don't take this the wrong way as I honestly do not mean to discourage you. However, a few years ago I considered investing in a daycare facillity run by a business associate's family. So I did some research and found that daycares are notoriously low profit businesses. One of the main competitors for child care facilities is moms caring for kids, both legally and illegally, in their homes. They pocket the money they make and never report it, never pay taxes, never get insurance, permits, etc. It's hard to legally compete against something like that.

            Also, my daughter helped put herself through college working at a daycare and they pay very poorly. One reason they pay so poorly is that most parent are extremely cheap when it comes to spending on daycare. My daughter saw parents move their kids to a different daycare to save $5.

            Again, my point is not to discourage you from starting your own business but to suggest that your efforts might be more profitable in some other type of business. You seem to have determination and drive, you might consider putting those qualities to use in a different business or perhaps pursuing this one a different way.

            If you are determined to go into this type of business, here's a few ideas:
            If you're going to do traditional day care, aim for high-income families. You may find them more willing to spend. However, be prepared to offer more than the basic babysitting service for this market. \\ You might consider partnering with a big corporation to offer child care at thier corporate headquarters. With the slow economy you might find this a tough sell. Then again, you might not. A company might figure, hey we can't afford raises but we can offer child care. Perhaps they would provide space in thier building, you watch the kids and maybe split the profit? \\ Another interesting take on child care I saw recently was hourly child care. They leased out some space in an upscale strip shopping center and took in kids for short periods of time while the moms shopped or whatever. You might even consider doing that on an after hours thing for parents that want to have dinner out. A mall, or big shopping center might be willing to work with you some on a deal like that on the theory that it would attract more shoppers and diners.
            I guess basically what I'm suggesting is that if you've hit roadblocks, maybe it's time to think outside the box?.
            • Re: I need Help!!
              Milleisen Scout
              Hi Rachel - Its admirable that you want to undertake a venture like this. In order to figure out where your issues are, and how to address them , I'm going to pretend I'm a potential lender and ask my lender questions.

              Q: Have you worked through a budget to get a handle on the costs to start a daycare center? When will you start to turn a profit?

              A: First and foremost, finish your business plan and include projections. If you don't know how much you need, a lender will not figure it out for you. A lender will want to see how you arrived at a specific loan amount, so don't just throw a number out without being able to back it up.

              Q: Do you have any experience running a daycare center? If not, what makes you qualified to do so?

              A: If you do have experience, it needs to be in all aspects, not just as an instructor. If you don't have any direct experience, the first thing you need to do is get a job at an existing operation and learn every aspect. The finance, marketing, management etc. You'll gain keen insight into the major issues, what works, and what will change

              Q: How much capital will you be putting into your venture?

              A: Since you stated that you don't have any funds, you need to find some, and not from a bank. Banks are debt holders, not equityholders. What this means to you is that if you don't have any money in the venture, they won't give you theirs. Some possible ideas: find a partner (especially one with experience in this type of business) with capital to invest; think about using a home equity loan if one is available to you; approach a local existing business about a joint venture in a 2nd location (you'll again need to demonstrate competence in running this type of business).

              Best of luck!
              • Re: I need Help!!
                Yardbird Wayfarer

                Congratulations for your entrepreneurial spirit and desire to start a small business. Small business is the back bone of the American economy and all start with an idea like yours.

                I would encourage you to first complete your business plan and determine how much money you need to get started. Make sure you know the regulatory requirements for day care, any required special education or licensing required by state and local governments as you continue to develop your business plan. You may want to look into the zoning and legal requirements of starting a baby sitting service out of your home rather than a full fledged day care business to start out. This may solve your money and time problem without a large capital investment.

                After the planning is done, determine how much money you will need to get started by making a list and putting down dollar amounts as below, though this list mya not be comprehensive:

                Rent & Rent Deposits

                Facility Build out

                Utilities & Utility Deposits

                Telephone & Internet connections

                Licenses

                Insurannce

                Payroll & Payroll taxes

                Advertising & Promotion

                Franchise? If yes, you need to factor in these costs

                Furnishings, Computers, Games, and other things needed to operate

                Estimate monthly principal & interest payments to those who lend you money

                Working capital to keep the doors open until you get enough children to pay the bills

                Now you are ready to look for money, you have a plan, you have done your homework, and have a list of how much money you need to get started.

                Typically the money at this stage of business development will come from family and friends. They know you and your work ethic, your determination, and trust you to pay them back. So start there and think about who may be able to help.

                If you have a good credit score, your bank may be willing to give you a credit card with a high dollar amount and low % for cash advances. The sponsor of this website, Bank of America, has some programs that may meet these requirements.

                Another avenue is to find a capitalized business partner who shares your vision for a day care center, loves children and wants to be a part of something. Colleagues, other students at school, parents & grand parents of potential day care students are all potential candidates to take part.

                Need more money than family & Friends can provide?

                Banks other than for credit cards will only loan if you have sufficient collateral and good personal credit and money is tight right now even in the best of those situations. And the business with no track record will be difficult to finance for at least the first couple of years. However, a home equity loan could be an option if you have a home with equity.

                Good luck with your venture.