Just Kidding: An Enterprise Project, Coursework Example

Just Kidding is a company which organizes on-site daycare centers for large enterprises. Just Kidding offers its services to working parents who can seek for an alternative to formal child care because of unsatisfactory conditions, high costs and time-consuming procedures of fetching children to and from such child care centers. Just Kidding gives parents an invaluable opportunity to be closer to children while at work, for instance, by having lunches together with the kids and to avoid unpleasant experience often associated with formal child care both in quality and in cost. To children Just Kidding means excellent care, fun and college preparation as well as an all-important sense of keeping contact with the parents who usually work in the same building. Can the companies benefit from establishing on-site daycare? The answer is surely “yes” despite the initial expenditures on providing the necessary space, building facilities and hiring new staff. The statistics shows that the companies soon come to enjoy less turnover and a substantial reduction in days-off for working parents. Moreover, an on-site daycare center is a substantial contribution to the company’s family-oriented image.

Key Factors Considered When Selecting the Enterprise

This enterprise project presents an attempt to apply the principles of enterprise organization which we have learned in modeling a business plan. The enterprise I chose is a small service operation with great potential for growth and expansion. I turned to the idea of an on-site daycare center because I know how urgent it is for a great number of American families. Being separated from children during long working hours and worrying about them is very stressful for parents, especially for breastfeeding mothers. Knowing that the kids are well cared after and having an opportunity to see them during the day will take much pressure off them. I also remember that my experience of attending a formal child care center when I was small was extremely hard and distressing. I used to cry all the day long eager for my Mum to come and take me away from that place. I believe that if a child knows that he / she is going to spend the day together with his parents performing his duties of playing, learning, and resting while the parents are performing their duty of working, he / she will be happier with the time spent in the center. I investigated the situation and found that on-site daycare facilities are provided by a sadly small yet growing number of companies. Comparatively low birth rate is accompanied by an increase in the proportion of dual-career families. Back in 1975, only 34% of families with children under six had both parents working. Today the figure amounts to 60% of families. Moreover, about 20% of working parents are single and raise children alone. Overall, the number of parents with children under six years old that are employed comprises approximately 90 million.

According to the statistics, child care takes an equally substantial part of family budgets of low-income and middle-income families. It is estimated that working mothers spend an average of $92.30 per week per child for formal daycare. If they pay for relative child care, the cost amounts to about $66.18. Family daycare costs approximately $56.12 per week per child. This stands for about 9.0% of family income in case of non-family daycare and 7.4% in case of family care. Although higher income families are reported to spend more on child care, their expenditures comprise a smaller proportion of family budgets in comparison to the budgets of lower income families. High income families spend an average of 6.1% on formal day care expenditures, while low income families spend 18.4% of total family income on formal day care. Alternatives to formal day care usually cost less for both income groups. It is estimated that low income families spend 11.8% of total household income on relative care expenditures and 12.7% of family daycare. Since 1987, a steady rise in the proportion of family income spent on child care can be observed irrespective of the level of family income (from 6.6% in 1987 to 7.5% in 1999). At the same time, the percentage of working mothers paying for child care has also been on the rise and comprises currently about half of all mothers (Boushey, 2004). This statistics gives a clear picture of how strenuous child care can be for families, discouraging them from having even a single child to say nothing about giving a birth to a number of them.

Furthermore, high cost of formal daycare does not mean correspondingly high quality. A recent survey conducted by the University of Massachusetts at Boston revealed that one of every six parents had ended their childcare arrangement in the period of the last year because they found the quality of daycare poor. Another study, conducted by the Yale University, showed that 86% of US child care centers provided “poor or mediocre” care. In comparison, on-site daycare centers are generally believed to be high in quality. As a result, the latter have waiting lists for up to 50% of their capacity.

However, on-site daycare has not become as popular as it might have been expected and as it deserves to be for all the benefits it offers to employed parents. A recent survey of over 1000 American companies held by the Families and Work Institute revealed that only 9% of large (100 and more employees) companies provide on-site daycare. Although the number of such companies has grown substantially (from about 200 companies, of which the majority were in hospitals and only 42 in private companies, in 1982 to approximately 8,000 today), the percentage still remains very low and does not satisfy the today’s need of 9 million employed parents of children under six in the on-site daycare.

The above determines the conception of our service: child daycare that leaves parents assured that their children are healthy, educated and entertained and creates a happy and safe environment for children. My company will be one of the ground-breakers in the sphere of promoting on-site daycare.

Process Selection Criteria

Facilitization

A daycare center of proper quality will take approximately 60 to 100 square feet of indoor play space as well as 75 to 100 square feet of outdoor play space per child (in Massachusetts the standard is minimum 35 square feet indoors and 75 square feet outdoors). A center that is to house 75 children will take approximately 4,500 square feet of indoor space excluding space for kitchen, staff rooms, and other necessities and 5,600 square feet of outdoor space. If the facility is to accommodate infants, according to most state fire regulations it should be built on the first or second floor. Many work sites do not have such space available, while others find it too expensive, the latter being especially true for large urban centers which pay immoderately high rents. Construction costs usually fluctuate between $65 and $200 per square foot depending on the layout of the building. Third come equipment costs which amount to about $2,500 per child. It means that the initial investment of a company in a daycare center may amount to 1.5 to 2.5 million dollars provided the company has no existing space to spare.

We also plan to provide quite a rare service – daycare for young schoolchildren which will allow them to rest after school, get proper meals, spend time outdoors and make their homework. It means that the center should be well-equipped technically because many schoolchildren require computerized workplaces. The initial number of such places may amount to ten. Large companies are unlikely to find this requirement difficult to meet because they already possess a great number of computerized workplaces.

Mission

Just Kidding is an on-site child daycare service which helps companies establish daycare facilities and provides highly-qualified staff who are ready to organize the work of the center and form its personnel.

We work with infants, toddlers, pre-school and young school children providing first-class care for each age group. Not only do we guarantee that children stay healthy, take time to rest and socialize, spend hours outdoors and get regular meals, but we also create an effective learning environment. Our experienced tutors will develop the children’s early social and motor skills, teach your children to read, write and count and give them the basic knowledge of sciences to prepare them for school.

Despite the fact that many child care centers fail to provide facilities for young school children, Just Kidding understand that the children of six, seven, eight, and nine still cannot be left all to themselves. It is extremely important to create an opportunity for them to have their meals, rest after school and prepare for the next school day as well as to take part in extra-curriculum activities such as arts and crafts, dancing, playing in Just Kidding theatre, or doing sports.

Due to Just Kidding, parents can enjoy feeling closer to their children, having a chance to see them at any time whenever they have a break at work, not having to fetch them to and from a distant child care center, and being subsidized by their companies for paying the cost of childcare.

Just Kidding will help any company create a family-friendly environment and earn the loyalty and commitment of its employees. Moreover, companies can expect economic benefits in reduced staff turnover and much less days-off taken by working parents to be with their children when necessary. Just Kidding creates a healthy environment of cooperation and happiness for each company.

Goals

• To create a team of child care professionals and provide extra specialized tutoring
• To help the company prepare the material base for the on-site center
• To organize our first on-site child daycare center
• To provide highly competitive child care and tutoring
• To develop a perspective network of on-site child daycare centers unified by the common conception

Objectives

• To enroll up to one hundred students during the first year of operation in the first center
• To keep a high raw gross margin during Year 1
• To open second and third on-site center by the end of Year 2
• To start a franchise effort in Year 3

Process Flow

This process flow diagram gives an idea of how Just Kidding operates. First, we get an order from a Client Company – presumably, a large organization which can allow enough space to accommodate the on-site daycare center as an element of its employee-friendly image. On receiving the order, Just Kidding starts organizing the site for the company; all the necessities are well thought over in advance and Just Kidding spares the company extra planning and arranging efforts. Just Kidding also provides a complete highly-qualified child care personnel who will be working for the company once the center is established but will always have a chance to apply for extra tutoring or other services provided for them by Just Kidding.  Meanwhile, the company advertises the center among its employees and enrolls the initial number of about 75 children from infants to young school children requiring daily child care. The center will operate on workdays (excluding national holidays acknowledged by the company) from 7 am to 6 pm (the schedule is specified according to the working hours in the company). The parents bring their children to the center as they arrive at work; each child spends his / her day in his / her age group which follows a specially designed daily timetable which generally includes five meals a day, afternoon nap, two walks, lessons and playtime for children aged 3-6 (special schedules are designed for infants, toddlers, and young school children). The parents then pick up children at the end of their workdays. The parents pay for the daycare to their company. The high expenditures on the establishing the center often result in increased cost of on-site daycare for parents, although many companies do not expect money back for the construction and other up-front costs and even provide permanent subsidy to cover maintenance, utilities, and liability insurance. Still, many employees find even the remaining costs unaffordable. Their companies practice different solutions to the problem. Some of them charge the going rate in the community (the sums amount to $325 for infants and $260 for toddlers) and increase subsidies that cover operating costs. Other firms offer sliding scales and additional subsidies. For example, tuition fees at daycare centers may be based on the employee’s annual salary; if the salary is under the established minimum, the employee receives significant discounts. Of course, adopting sliding scales may mean increased expenditures for a company in case there are many underpaid employees. These are the policies we offer to our client companies.

Capacity Measures

The newly-built on-site daycare center may be expected to bring profit in the near future provided it accommodates no less than 40 children (the optimal number is 75). The establishment of the center may be hindered by a number of factors. First of all, we prepare a universal system which includes the material base and staffing and needs to be adapted to the needs of an individual client company. The bottlenecks might be expected on the part of the client company: financial problems, problems with space and equipment, staff enrollment procedure problems etc. Further problems may arise on the stage of enrolling children – at least because it might take considerable time to advertise and attract parents with the benefits of on-site care before they decide to give up the child care types they will be using at the moment in favor of Just Kidding center. The problems associated with different payment schemes are described above in Process Flow.  On the part of Just Kidding, bottlenecks may be caused by staff turnover resulting from enrollment of our caregivers and tutors in daycare center; we will have to be in constant search for new candidates and train new personnel. Although we will definitely welcome a 50% increase in demand, which is quite possible due to the competition between parents for places in on-site daycare centers and queuing observed nationwide, it will mean increased enrollment and the challenge will be to maintain high quality through an elaborate selection process and additional professional tutoring. In the situation of excessive production and lowering demand we will first and foremost welcome part of the personnel back from the companies, unless the companies are willing to avoid downsizing, and spend the period of low demand on tutoring and finding extra workplaces, perhaps, in formal child care institutions. Our company works largely as a human resources management organization and we aim at providing adequate workplaces to all our people. Also, specialized demand (too many places for infants or for young school children, for example) may put extra bottlenecks in equipping and staffing the center.

The expected capacity which we can maintain allows opening the first daycare center for 75-100 children in the first year and the second and third centers – in the second year of operation.

Production Planning

Just Kidding can adopt a number of ways to modulate capacity of the company in response to changing demands. The main method is more or less intensive staff enrollment. For example, we plan to rely on freelance professionals for staff training, which is very convenient at the early stages because it allows to hire and reject services according to the circumstances. Inventory buffers are formed by the material base we plan to provide for the on-site daycare centers. However, at the moment we do not plan to store a large proportion of daycare equipment in Just Kidding (only the extras which have not been used for a center and the fundamentals which may be used regularly and which are required for staff training); we rather expect to work as go-betweens for shops and companies.

Worker Information Requirements

The greatest emphasis in Just Kidding is put on our personnel – highly qualified and experienced caregivers, tutors, instructors, cooks, and technical staff. Of course, we would require perfect education documentation as well as the necessary sanitary permissions. Moreover, our permanent board of experts will interview each candidate and select the team able to provide first-rate care in the environment of happiness and trust between children and caregivers.

Since we are a service rather than a production company, the main resource for us is undoubtedly time – the time we spend with children and their parents. We find it paramount to create an atmosphere of mutual psychological comfort which would give a sense of security to children and ensure effective working conditions.

Technology, however, is also very important for us because we keep pace with technological development in educational sphere and make extensive use of computer-based educational programs etc.

Quality Control

Quality control within my firm will be performed on three levels:  public control (general evaluation of child care institutions); Just Kidding expert control, interviewing parents and monitoring the success of the company according to our goals.

We are going to control the responsiveness of our staff to children, the way they communicate, the discipline and the appropriateness of educational activities. We will also evaluate such structural features as group size and age composition, staff turnover rate and professional training level, the ergonomic organization of space, quality and quantity of materials etc. We plan to ask the opinion of the parents about our services through direct communication and regular questionnaires, especially on early stages.

The main components of Cost of Quality in our company are parent satisfaction and ensuing increased demand for our service, the profitability of the project for the client company and the satisfaction of our employees with their work.

Vertical Integration

Our company, which currently consists of a single office, has a great potential for vertical integration, both backward and forward. For the time being, we mostly rely on multi-contracting with our clients and firms which provide the necessary building materials and services as well as various equipment. However, the expansion of our company implies opening subsidiary centers and centralization which will ensure quality control and maintaining a uniform conception throughout the company. We can also think of expanding our material base and opening specialized educational stores. Forward integration is possible through opening new Just Kidding centers and offices, presumably, in other cities. These objectives can be accomplished within the first five years of successful operation.