Daycare Facility

Daycare Facility 742
Photo by: Pavel Losevsky

Rachel's Clubhouse

2 Sandy Hollow
Sunset, IN 47400

Tony Tecce

This short, concise business plan raised $25,000 in funding for the owner of a daycare facility opened in a small community in great need of such an operation. The business was sold when the owner decided to move out of state to be closer to family.


Rachel's Clubhouse (the "Company") will fill the void for a first–class daycare facility in Sunset, Indiana. There has long been a shortage for quality daycare due to the lack of availability of a competent location. However, a location now has become vacant and is perfect for the Company. Planning for this business has been ongoing for over four years by management. The total cost of getting the Company in operation is $700,000, which includes building/property acquisition, renovation, equipment and operating capital. The Company intends to raise all of the project's costs through this offering.


Currently there is only one commercial daycare in Sunset, Indiana. There are other after–school programs and the like, but only one that offers daycare for infants as well as toddlers. Over four years ago the other commercial daycare, West Aurora Daycare, was closed due to possible child abuse. During the time following the closure we have been trying to find a suitable location to satisfy the Betow County Social Services licensing requirements. After numerous licensing attempts, the building itself was always the problem.

To obtain a license there needs to be 34 sq. ft. per child inside the building, 37 sq. ft. per child of fenced outdoor area, and level entry to the building. To our surprise, there are not too many qualified buildings for sale or lease in Sunset, Indiana.

The Clubhouse Experience

Our goal at Rachel's Clubhouse is to encourage creativity, individuality, and independence. We have created an environment filled with love, patience and kindness.

The staff at the Clubhouse is qualified in Early Childhood Education; each teacher plays an important role. We always keep in mind that children learn through example and often mirror adults. We set our standards high and expect our staff to set through example.

We have a set curriculum for both age groups; infant through two years, and three years through five years.

Our infant/toddler class will encourage the children to explore and discover his or her world daily. This will be accented with the use of sensory activities and language development (children will learn by "doing"). The teacher will provide the parent with a weekly goal, in keeping with the learning environment. Parents are always welcome to take part in classroom activities and share ideas with teachers who are always happy to discuss concerns or answer questions.

The discovery class, ages three through five years, will do just what the name suggests. This class will learn through discovery centers set up on a weekly rotating basis. The learning centers will vary from science, language, math, housekeeping, daily life skills, and social development.

For the curious parent, we will have two live web cams hooked up to the Internet. Every 15 seconds a picture of the play area will be uploaded to our Web site. This will allow the parent or other relatives to check up on what their child is up to, any time of the day.

Along with teacher instruction, the child will have the opportunity to develop his or her own hands–on learning style, giving the child the chance to learn at his or her own pace, allowing them to master a skill that which they are comfortable.

Teachers will provide the parent with a weekly goal sheet encouraging parents to take part in the weekly lesson and reinforce the daily learning experience at home. On a daily basis children will be given the chance to work with computers, musical instruments, large muscle equipment, manipulative items (i.e., blocks) and arts and crafts.


The Company plans on being open for daycare by Fall 2006. By the third year of operation we will expand the infant care, tripling the capacity.

The projected revenues are based on five infants and forty toddlers/walk–ins per day. We will be the only facility open seven days a week. Based on these occupancy rates, our first year revenues are projected at $415,000 with pre–tax profits of $166,000. These numbers will create a return of investment (ROI) of 10 percent during the first year. There is enough space to expand in the future, depending on demand.

Location Selection

At present, we have located a suitable building for purchase. The asking price is $399,000 which includes 3,000 sq. ft. of Commercial Floor Space (C.F.S.). A daycare facility does not require the use of C.F.S., the value of which is between $100,000 and $130,000 and can be sold off or used elsewhere by the equity investor. Renovation will be needed to the parking area, landscape and interior of the building. Many of the interior changes being made are to conform with ADA requirements.

This property is located at 2 Sandy Hollow in Sunset, Indiana (the old Weaver Cotton building).


Our target market is Sunset, Indiana families with young children. As of the most recent demographic analysis for the Sunset area shows 6.4 percent (458) of the population is between the ages of 0 and 5 years. We will target these families through some print advertising and a mass mailing.

Also, we have secured and exclusive agreement with Highland Brown Insurance (2,000 employees) making us their weekend daycare facility. All of their promotional literature will list Rachel's Clubhouse as the facility for any daycare needs. Parents will be given beepers to notify them if there are any problems with their child.

The print advertising will be placed in the local newspaper announcing the opening of the daycare. Along with the ads, we have a connection at the paper for a "Business Brief" article that will not cost any money, the best free publicity available in Sunset. We plan to have the article printed well in advance of opening to facilitate pre–enrollment.

Shortly following the release of the newspaper article, we plan to do a mass mailing to every box holder and household in Sunset and Crystal Lake. There are 7,000 boxes and 250 home delivery and at a rate of 11.2 cents per piece, this is a very affordable and effective way to advertise.

We have had enough inquiries to date, through word–of–mouth, to be completely pre–enrolled before opening the doors to the business. Obviously there is great demand for a facility such as ours.


Competition consists of Teeney Weeney Tots, Lucky Kids Club, the Baptist Church's Sunrise Nursery School and home daycare.

Teeney Weeney Tots is Sunset's only full–time, commercial daycare. They take children Monday through Friday from 7:30 a.m. to 6 p.m. They will be our only direct competition. But, direct competition in the sense that they provide a similar service; they consistently have a waiting list for children needing daycare. Quality of service has always been a question when Teeney Weeney Tots is concerned: Poor teaching, poor supervision and limited space are some of their shortcomings.

The remaining licensed competition falls into two categories: part–time commercial and home day-cares. The part–time daycare facilities run either limited days through the week or only a few hours during the day. These types of facilities do not offer a full–time daycare. For instance, the Sunrise Nursery School offers either two– or three–day sessions (only three hours per day.) These types of services also restrict the age of the child, accepting none under the age of three years.


The management team consists of Edward and Rachel Browning. Both have qualifications that will be essential to the Company. Edward has the business savvy and Rachel has the childhood development experience.

Edward owns and operates several local businesses. His experience covers all aspects of business, including start–up, bookkeeping, marketing, graphic design, computer consulting and teaching.

Rachel is currently licensed with the local County Social Services Dept. for home daycare. She has been operating a home daycare for five years with over eight years of childcare experience. She is the key to the Company, not only due to her experience, but notoriety within Sunrise as a long–time resident.


The Company wishes to raise $700,000 to carry out the goals mentioned in this plan. The total amount to be raised can be offset by a lesser purchase price for the property, as well as the value of the C.F.S. that can be used or sold off by the equity investor.

The investment provider will receive 50 percent share ownership of the Company. The projected first– year return on investment is 10 percent, increasing to 17 percent by the third year.

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