I intend to employ on 3 to 4 employees along with my self and caterfor approximately 12-20 kids once the business has established itselfthen I may decide to expand and cater for more children.

THE PRODUCT

I have selected anurserybecause there is high demand in the UK aswell that there is a reasonable amount of profit, which can be made ifthe business is planned out correctly. One of themain reasonswhydemand is so high is that more women then ever before are going towork, and therefore day nurseries provide a suitable environment fortheir children to be looked after in.

THE MARKETOne of the main reasons why demand is so high is that more women thenever before are going to work, and therefore day nurseries provide asuitable environment for their children to be looked after in.

PRODUCTIONSince my business is basically a service that is a day nursery hencethere is no production involved it is the services, which I provide tomy customers. I offer milk to the kids, if any of the kid needs milk Iwill be offering them, then there will be a rest room in which thosekids who are tired can sleep in that room, the third service which Ioffer is playing, I will be having a room in which all the toys willbe there all the kids can play there, my childminders will play withthem, and the fourth service is giving the kids basic education.

EXPECTED PROFITFor my business to be successful it is very important that it shouldmake profit , so at the end of one year I will be making a profit of2454 which shows that my business is going to do well, its just thestarting as and when my nursery becomes popular among the people Ithing it will be doing well and making more profit.

FINANCE NEEDEDAs mentioned in financial and production plan I will be looking toobtain a loan of 5000 from the bank. If the bank rejects myapplication, then I will consider getting a sleeping partner so that I can apply again for lower amount. I could also find a partner and thenhalf the investment. This is because currently I have personal savingsof 3500 and could use 2500 of this to open my business with mypartner. When discussing the plan with my father, he agreed to helpwhenever he could so the last report to raise finance would beforehim. This is because he has good credit rating with the bank and canobtain a loan for my business.

LEGAL STATUS Private Limited Company

Its advantages are:

Limited liability will be there.

Control is maintained.

Easy to get finance.

Less risk is there.

NATURE OF THE BUSINESS Nursery for Kids

Have 4 staff and I will be the head. The timingswill be from 8 am till 6 pm from Monday to Friday.

START DATE 1st January 2015

SHORT TERM OBJECTIVE JBswill within the first twelvemonths of working:

Increase profit by taking in more children in the nursery, andmaking a profit of 5000.

My breakeven will be 573bookings in one year

Achieve enough bookings.

Will have 3 full time well trained staff.

LONG TERM OBJECTIVE JBswill within the first threeyears in Nursery:

Establish the business name and reputation.

Increase profitability to 15% by achieving more bookings.

Achieve a market share of 10%.

Expand the business by opening another branch if there is reasonabledemand.

Employ 2 more additional staff.

MARKET ANALYSIS

MARKET FOR MY PRODUCT

Market-The UK childrens day nurseries market had worth 2.7 billion in2003. Like the broader childcare sector, the childrens nurseriesmarket has grown rapidly in the last 10 years, and is now more thanseven times the size than at the end of 1980s. Increasing demand fornursery services and general childcare from working mothers has drivenmarket expansion. The key factors driving demand include delayedfamily formation, increased female work participation, and a shift inpreferences from parents towards childcare and early years education.Private individuals in the UK spent an estimated 2.2 billion onchildrens day care services in 2003.

Market SizeA total of 12,075 childrens day nurseries in the UK provided 537,450places for children between 0 and 5 years in January 2004. Averageoccupancy for the UK was 85%. Nursery sector capacity has more thanquadrupled between 1990 and 2004, concentrated solely in theindependent sector at a time when local authority provision has beendecreasing, though it has started to grow again.

All this shows that there is a high demand for nurseries One of themain reasons why demand is so high is that more women then ever beforeare going to work, and therefore day nurseries provide a suitableenvironment for their children to be looked after in. The parents ofchildren will be working people and will be basically upper and middleclass parents, some of them will be part time and some will be fulltime.

Customers-After analysing the childrens day care market I have cometo know that the children from the age o to 5 can attend private daynurseries. This is because when children reach the age of 3 in thesenurseries they are then taught the national curriculum.

However, volunteer day nurseries can only provide for children theages 0 to 3 this is because they do not teach the children thenational curriculum and therefore the children attend nursery andreception in a primary school.

Parents who want their children to attend a nursery want to have easyaccess and do not want to travel too far in the morning to drop theirkids off. Hence the following has to be considered. The targetcustomers for my nursery will be parents who have got kids agedbetween 0 and 5 years because they will be the ones who will bewilling to put their kids into my nursery. The people will be thosewho will be having good incomes so that they are able to pay for theirkid who will be studying in my nursery and also who will be havinggood status, they will be basically middle and upper class people whowill be bringing their children in my nursery.

Residential Market-this means that most parents would not use thenursery if it was more than 5 miles away from their house .As well asthat I have to look at the average income in my area, which I tend toopen my nursery in Ealing and see if the parents can pay theanticipated fees. Futher more how high is the demand in Ealing forprivate day nurseries and how likely is it for the parents tosubstitute a day nursery for nanny child minder?

Commuting Market-made up of people who will drive past or the nurserywhen they are going to work. This is so that it will be convenient forthe parents to drop their children off in the morning and pick them upin the evening. Finally what are the major transport link near thenursery i.e. bus stop train station.

When looking at results above I can see that Ealing is very denselypopulated when compared to other areas in West London. This is goodthing for my business because there is a larger market to target .Anaverage age for resident living in Ealing is 35.6, this is lower thanthe countries average and therefore it could lead to younger parentsand younger children furthermore the number of under 16 years old hasincreased in Ealing and hence there will be more children who may besuitable for the nursery.

London itself is very multicultural society. However; Ealing itselfhas ethnicity of 41.3%, this means that when marketing my service Iwill have to launch a marketing campaign that will attract allethnicities and cultures. Finally more than 30% of the households donot have access to personal transport i.e. car or van therefore thelocation of the nursery must have transport links .For instance basednear a bus stop or densely populated housing area.

Now I will loot at employment figures and an average income to decidewhat rate I could charge my customers. Furthermore I will then look atmy competitors price and see what the difference between the two is.

Analysis of table

There are nearly 117000 employees in Ealing who either full time orpart time jobs. The most popular form of employment in Ealing is inbusiness services. (23.4%) This then closely followed by the retailand wholesale sector (21.9%). In Great Britain15.5% of employment isin the business services sector hence there is a difference of nearly8% when compared to Ealing.

There are 12 boroughs in London and only three have higher employmentpercentage in retail and wholesale trade than Ealing. This is a goodsign because it means Ealing is not doing to badly on employment.However, property prices are very high and therefore it means somepeople can buy a house and must rent. Furthermore this leads them tohave less money to spend and it could result in my nursery having toreduce rates considerably.

PRIMARY RESEARCHE1 Questionnaires-For my Primary Research I got the questionnairesfilled, as they are an effective method and allow the business to askspecific questions from the customers. It can then see what theresponse of the customer was before making any judgement. Thequestions I designed are specifically related to my service. I got myquestionnaires filled from Ealing high street as my nursery will be inEaling only, went to different people and firstly asked them if theyhave a kid who is between 0-3 years if they said yes then only I askedthem to fill the questionnaires. The questionnaires and the graphs areattached in Appendix.

Analysis of Questionnaire-My questionnaire was based on people who had children aged 0 to 5.Hence everybody who answered the questions had a child between thatage group. If the candidate did not then their questionnaire wascancelled, as they were not a suitable for the research I was lookingfor.

From the people I questioned 45% said they would need a privatenursery 5 days a week, so there is a demand for it.

55% of the people would prefer a better changing facilities and othersnacks, along with this having a safe environment is the mostimportant quality for the parents followed by keeping child safe andhappy.

At present the parents mostly used the services of Asquith courtfollowed by Saplings.

Most parents said they would require the services of the nursery inFebruary.

I received a 80% response from parents that they would be interestedin sending their children to a day nursery. The other 20% did not wanttheir children to attend a private nursery. So overall I can use thisas a big positive because there seems to be high level of interest.

18% of people said that they did not have access to their owntransport. I have to keep this in mind when situating my nursery. Thisis so that it should have reasonable transports links, or beaccessible for customers.

80% of the candidates were in full time employment. The remaining 20%were unemployed or in part time employment. This seems good because ifthe number of full time employees increased then it will mean thatmore people will need some one to look after their children.

80% of the candidates said they would prefer a day nursery than ananny to look after their children. Once again I can use this to mybenefit because the majority would use my service instead of a nanny.

85% of the candidates said they could recommend a friend or a relativewho may be interested in sending their child to a day nursery. Thisalso sounded well because if customers recommend my service to othersit will mean a higher turnover and possibly more profit for thebusiness.

I received an overwhelming response from candidates saying thatsending children to day nursery was one of the best methods tointroduce children to the concept of learning. A small minority didnot agree with us.

9%of the candidates said they would be willing to pay between 0-100per week for their children to attend a day nursery. However 21% saidthey would be willing to pay 101-200 and 70% of people are willing topay 201+, so I will be keeping my price as 201, since 70% of peopleagree to this price.

Now that I have completed my questionnaire and have analysed it, Ibelieve that there would be demand for my service and that I should goahead with opening a nursery. However social and political topics inthe future could have a great influence to my business.

Face to face Interviews-For my primary research I also hadface-to-face interviews with the customers as I thought it is a usefulmethod to interact with the public, and find out their views of anursery in their area.

The Pest analysis stands for:

Political

Economic

Social

Technological

Political-There are many political factors that can affect the marketof a day nurseries. This is because external factors such as war orterrorist attacks can cause paranoia amongst the public and they canloose faith in the services being offered to them. Whats more is thatthere are many legal factors that can affect the recruitment foremployees. Currently today an employee at private day nursery musthave several qualification or must have taken certain courses fromthem to be legally qualified.

There are several employment polices in the UK which I must follow tooperate legitimately. For instance employment regulations such as theSex Discrimination Act are followed worldwide. However differentcountries have their own age and minimum wage regulations. I must notbreak any of these laws otherwise I could face legal action. Thecurrent government is introducing subsidised childcare costs/benefits

I should follow those subsidies only.

Economic-Currently, the UKS economy is battling its way out of aneconomic recession. Therefore with the rate of a familys income andthe state of economy will greatly determine how much I can charge perchild. The rate of inflation will also affect the rate I chargebecause if prices go up then it will mean that I have to increase howmuch I charge.

The amount of import and export will affect the amount of wealthleaving and entering the UK.Therefore if there is unbalance it willaffect my business and how much I charge.

At the moment an average salary for nursery worker is based in theregion 12 to 15 thousand pounds. If there were a shortage of workersor the pay went up then it would mean that I would have to pay more toa worker and possibly charge customers extra.

Social-There are many social factors that can affect the looking afterof children. This is because recent topics such as paedophilia andchild abuse may put of some people from putting their children in daynurseries because they may lose faith.

Some workers who havent got the legal qualifications must not berecruited if discovered it could become a major media topic andpossibly dent the market heavily.

Recently parents have been advised to spend more time with theirchildren at young age and do basic learning activities. Parents whodont have time will be more eager to send their children to a daynursery so that they can dont miss out on their learning.

Furthermore research (Harralambos and Holborn Sociology themes andperspectives fifth edition) has proved that more women single parentsare going to work than ever before. As well as that generally morewomen are going to work than ever before. Therefore their childrenwould require a place to be looked after in. Finally family valueshave changed dramatically, in previous years most familys had astrong bond and these days some families dont have a strong enoughbond. For instance strong bonds grandchildren being looked after bytheir grandparents .Yet these days this is not always the case henceparents have to find other alternatives.

Population Growth

Since around 1650, the world human population has grown massively, atan increasing rate until recently, from some size of the order of 500million, to over 6 billion now.

Demographic Transition

In the industrialised or developed world, during this period ofgrowth, national populations have largely completed going through whatis called the demographic

Transition. The UK population is projected to increase from 59.6million in 2003 to 65.7 million in 2031. Population growth is expectedto continue beyond that date, peaking around 2050 at nearly 67 millionand then gradually starting to fall. All this shows that with theincrease in population there will be increase in the number of kidshence more people will be sending their kids to nurseries.

All the research, which I have done, based on demographic policies,trends in birth, change in family size, population movements is in

Technological-The technological factors can be the invention of newtoys if any new toys or any equipment is being introduced then thenursery has to adopt that because no parent would want there child tobe using old fashioned toys or equipment.

THE COMPETITIONDay Nurseries are more in demand than ever before. Therefore manysmall firms have seen a gap in the market and have tried to expand.

Below is a list of all the major private day nurseries: as you can seethat the market leader is Asquith Court. It occupies 60 nurseries in1999 and its main rival is Kinderquest who has 38 nurseries. Busy beesare another name to watch out for because it has 23 nurseries yetexpanding regularly.

All of the nurseries listed above occupy children aged from 0-5because they all teach by the National Curriculum and are inspected byOFSTED.

TARGET CUSTOMERS

C1 The target customers for my nursery will be parents who have gotkids aged between 0 and 5 years because they will be the ones who willbe willing to put their kids into my nursery. The children will bebasically from upper class and middle class parents who will be comingin my nursery as the rates, which I have, are reasonable which boththese class of parents can pay.

LIKELY DEMAND

C1 As after doing my questionnaires I can see that there is likelydemand for my

A1 service as all the questionnaires I have got filled are fromcandidates who have

Kids aged between 0 and 5 years.

12 MONTHS PROJECTED SALES

Marketing ObjectivesMarketing objectives are very important for every business as theyreflect and contribute to the achievement of the overall businessobjectives hence my business objectives are:

JBswill within the first three years in Nursery: Establish the business name and reputation. Increase profitability to 15% by achieving more bookings.

Achieve a market share of 10%.

Expand the business by opening another branch if there is reasonabledemand.

Employ 2 more additional staff.

After conducting my market research I have come to a conclusion thatthere is reasonable demand for the type of business I am planning toopen. This is because in my questionnaire I have managed to establishthe fact that parents both single and married parents are willing tosend there to a private day nursery.

The market itself is in the growth stage and has not yet matured. Thisis useful towards my business because it shows that there is a largerchance for the business to be successful than it would be whenentering a matured market.

I found out in my market research that Salaries in London were higherthan anywhere else in the country; once again this meant that morepeople could afford to pay rates, which I am going to charge.

My market research also showed me that small and medium sizedbusinesses could also be targeted because some employees may have tolimit their hours of work so that they can look after their children.However, they may extend their hours of work if they sent theirchildren to my private day nursery.

The major competitors in my market are: Asquith Court, Busy Bees andPrincess. They can be found on my list of competitors, which I foundwhen conducting my market research. I will try to look at how they dothings and which methods they use and then use the best ones for mynursery.

Finally I have discovered the major political economic social andtechnological factors that affect my business when operatingsuccessfully. What s more is that there are some factors which I haveno control and therefore advance precautions may be suitable.

Where do we want to be?

Once the business is ready to open, I will want the following to beachieved in the early stages (1-2yrs)

Establish the business name

Break even

Having a small promotion campaign running in selected areas

Having a stable and strong work force

Increase the number of children to highest ever after 1year

Increase market share

Expand the business by opening another branch if there is reasonabledemand.

Once the business has established its name it will mean repeatbusiness form existing customers and the customers introducingfriends. Futher more a good reputation may also result in competitorscustomers coming to my nursery.

It s essential for my business to break even otherwise it will resultin bankruptcy, further more the main incentive of the business is tomake a profit and this is only be achieved once the business breakevens and progresses further.

Having small promotion campaign in local areas will result in raisingawareness amongst the public and possibly attract new customers.Futhermore It will help people remember the business for the future,if they ever need to use it.

A strong and stable workforce will mean that the children can buildgood relationship bond with the workers and not need to readjustregularly. Futhermore the business will run more efficiently with astable work force because staff will be more experienced and have goodrelationship with each other.

After a year the business will be well established and the major goalwould be to increase the number of children. This will also result inincreasing market share and possibly making more profit. If there isan excessive demand then I may also consider expand the business andopening another branch or alternatively expanding the existing one ifpossible. Hopefully this too, will result in a larger market share andmore profit.

How are we going to get there?

Strategy and the four PS (Product, Price, Place, Promotion)

I will have to consider the four Ps when deciding to form a strategyfor my business. This is because the strategy will help me targetcertain customers and try to maximise the success of the business.

The four Ps are:

Promotion

Price

Product

Place

These 4Ps are crucial because its them that will have a big impacton the customers. This is because each P will determine to some extenthow much money my business takes in.

E2 Product-My particular product is a service .The service isaccommodating

C1 children aged between 0to5.Futhermore,once they reach the age of 3they will

be taught by the national curriculum.

Throughout their stay the children will be developing theircoordination skills and learning the alphabet as well as numbers. Eachchild will have a chance to sit down with a member of staff once aweek and have one to one with them. This could range from privatereading to games and discussing problems or issues.

There will be events in the school holidays such as painting and tripsfor kids aged 3+. As well as those parents who wish to come in atsome point to watch their children learn are most welcome.

I will try to look at teaching methods used by competitors and seewhich methods can be useful to me .The nursery will open in themorning at 7:30 am so that children can be dropped in the morning bytheir parents. However the learning itself will start from 9 am .Thenursery will close at 6pm.The long operating hours will allow moreflexibility to parents.

There will be a number of breaks and lunchtime for children to relax;this is not to say that they are going to be working all day long.Mainly because they will be taking part in fun and educatingactivities. However, lunch times and breaks will allow them to recoverand have rest.

The Product Life Cycle

A product life cycle shows the four stages that all products gothrough in their lifetime. However the amount of time they take to getto each stage and how long they stay there depends on the level ofsuccess they achieve .The four stages of production life cycle are:

Introduction Stage

Growth Stage

Maturity Stage

Decline Stage

Introduction

The introduction stage is when a product is newly introduced to themarket and wants potential customers to hear about it. It tries toraise awareness by focusing mainly on the four Ps (Product, Pricing,Distribution, Promotion). My business has already passed from thegrowth stage as there are a number of day nurseries which people areaware of hence my nursery will be new in the market but people alreadyknow about it.

Growth

The growth stage is when the product has made an impact on the marketand is building customers regularly. It now looks forward to thematurity stage. My business is on the growth stage because it has madea impact on the market but it still has to build up customers.

Maturity

The maturity stage is when the product has reached its peak. Howevernow it looks to remain there with high and regular sales with existingcustomers. My business is at the growth stage since its new in themarket hence it will need time to come to the maturity stage.

Decline

The decline stage is when the products demand falls and is not wantedby many. At times the product might be taken of the market due to poorrate of success. Since my business is new hence its at the growthstage so after 6 months only I can say where does my business stand.

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Flowchart: Preparation: Day Nurseries Market

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The day Nursery market is reached the growth period and has not yet byfar matured; this is because demand for day nurseries is growingrapidly day-by-day. Mainly because more single parents and women aregoing to work hence they need a place for their children to be lookedafter in. Furthermore there is a shortage in some parts of the UK forday nurseries. Its passed through the introduction period because daynurseries are chosen over nannies today as I found out in my marketresearch; because children can learn and play at the same time.

I will look around my local area and see where the most suitablelocation would be to base my day nursery. Whats more is that daynurseries face indirectcompetion from Crches. For instance someoffices, gyms and leisure places have special areas to look afterchildren while the parents can be alone.

On the whole I still believe that the Nursery still has few years togo until it can mature, as well as that if events such as sexualharassment or poor learning for children take place in a day nurseriesthen it could mean it will face decline period.

SWOT Analysis

This method is used to find Strengths, Weekness, Opportunities andThreats within my business. Futhermore I can see which areas are doingwell and where improvements can be made. It also allows me to hunt fornay opportunities that may be around.

Strengths-The fact that I have drawn up a business plan for mybusiness will allow me to form a base for all the different aspectsthat I may come across when planning my business. Whats more is thatthe market research that I have conducted will help me greatly, due tothe fact that I will have a better understanding of the market and thehazards that lie in it as well as the opportunities. I have a goodunderstanding regarding other areas of business that I have learnt inmy other units; this too should be very helpful .My market is in thegrowth section in the product life cycle, therefore I may come acrossmore opportunities and chances of success than I would if my marketwas matured.

Weaknesses-With any new businesses there are areas, which will affectthe rate of success. For instance entering the new market is alwaysdifficult and can sometimes result in business not establishing themproperly and possibly going bankrupt. It will take time for me to gaina reasonable amount of customers because some aspects of thepromotional campaign may not be as successful. The competitors whom Iam competing against will hold a strong share in the market hence itwill be complex to compete against them directly in the early stagesof the business. Therefore my main objective would be to establish thebusiness and breakeven.

Opportunities-As mentioned before, my market has not yet matured andso it will be easier to find or attract customers than it would be ina matured or declining market. More women and single parents going outto work which would also allow me to explore the market and possiblygain more customers. Furthermore I can approach employers or employeesand make them aware about the service that I provide which could beuseful in the future.

Threats-New businesses face the threat of not covering their costs andcan sometimes dig themselves deep holes. I will be cautious regardingthis issue and therefore will only go ahead with the business if thereis a reasonable chance of success. In addition to this my competitorswill also be a threat to the business. Current affairs such as childabuse and pedophilia may put people off from sending their children today nurseries.

In conclusion to the SWOT analysis above I can conclude on the factthat there will be a considerable amount of threats and weaknesses,which I must also make sure that the strengths and opportunities aremaximized to make the business stronger.

Ansoff Matrix

Ansoffs Matrix revolves around four different catrgories. Eachcategory tells the business what should be its next move. This isbecause the four stages: market Penetration, Product Development,Market Development and Diversification lead the business to anotherdirection.

Market Penetration-is selling a larger quantity to the existingcustomers of the business. This is not applicable to my business as mybusiness is selling the current product to the new customers.

Product Development-is introducing new products to the businessexisting customers. This is also not applicable to my business as mybusiness is selling the existing product to the new customers.

Market Development-is selling the current products to new customers. Iwill be starting a new product hence I will be selling an existingservice but to new customers

Diversification-is going to a new market and selling new products.This is also not applicable to my business as my business is thecurrent product to new customers.

A diagram to show Ansoffs Matrix:

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I will be starting a new product hence I will be selling an existingservice but to new customers. This is known as market development.Although I could vary certain aspects of the service in the future(Product Development).If business becomes a success then I may move onto penetrate the market by reducing the price and trying to expand andincreasing the number of children.Futhermore I may choose to diversifyin another market if my current market fails, or I see a gap inanother market.

Distribution & Place - Goods and services are often available in manyE2 places depending on the demand by the consumers. My particularservice is

C1 going to be based in areas of west London. This is because myprimary

research (questionnaire) resulted in a promising response.

The site itself will be split up into different areas. For instance aplay area for the ids, learning area, lunchtime break area, toiletsand seating area and fire exit.

To add to that flooring will be carpet and the nursery itself willhave brightly coloured walls so that it appeals to the children.

The seating area will have cushions on which the children can sit onand there will be area in the kitchen, which will accommodate any foodor drink bought in by the children. However, the children will beprovided with food and drink from us.

Price In most products, price is the key influence of purchase.Private Day E2 Nurseries are seen as higher class of early learningwith a cost. Families who

C1 are on low income may not be able to afford it. However, I will tryto charge

A2 below my competitors rates and try to encourage morepeople to put there

children in my Day Nursery.

Some day nurseries charge per week and I will start off doing the samehowever, if need to be I may charge per session and make sure that thehighest quality is offered to both the parents and children. In resultthe business will build up a good reputation, this. Once the businesshas regular customer then I may become more flexible during holidayperiods.

The amount I charge will also depend on the number of kids there areto a worker. This is because if there are only one or two kids to aworker, then the price for each kid will be high. However, if thereare four to six kids to a worker, then the price will be much lower.Another factor for price is, the equipment children use to build therelearning and coordination skills. This is because if each child hashis/her own mini computer then the rates charged will be higher thanif they use just books and toys.

Overall I feel that I can charge just below my competitors rates(market penetration) because the market researched has proved thatthis type of market is in the growth period, therefore there isreasonable demand for the service I am going to provide.

Promotion-Without promotion not many people will hear the service I amE2 offering. Therefore its absolutely essential that I choose thebest methods to

C1 promote the business and the business name. However, I mustconsider the

cost and justify it against the effect it will have on the business.For instance it will be pointless to do random leaflets, mainlybecause most people will not be interested in the service beingoffered .I must also remember that as the opening date is comingcloser, much more money is pumped into marketing since I would wantpeople to hear the business. Hear are some of the methods that areavailable to me.

Television-The adverts are a very useful method because it will giveme a chance to show the internal view of the nursery. However, I willnot be using this method because it will cost too much and not beeffective enough. This is because the advert will be seen nationally,however my business is based in West London, and those who see advertin other areas such as Manchester will not be able to use the serviceas they live to far away.

Internet-This method has become common in the last few years. This isbecause in the previous years not many people used theInternet.However, when advertising on the Internet will use graphicsof toys and bright colours to make it attractive as well as have ane-mail link and telephone number for booking or enquires. A website isoften cheap to set up and extremely useful. Therefore I will considerthis to be one of the main marketing tools to promote the business.

Newspapers and Magazines-In the early stages of the business I mayconsider advertising in pregnancy magazines or womens healthmagazines. This is because as my market research proved earlier onthat more women are going out to work than ever before. Thereforetheir children require a place to be looked after in. Overall I thinkI will use this method at some stage.

Radio-adverts are useful when they are to the point and get themessage across to the listener. I will not be using this in the earlystages of the business, however, I could use this method once I carryout extra market research and discover what radio stations mypotential customers listen to.

Billboards and Posters-Are one of the slightly cheaper methods. Thetwo are very similar however billboards are much bigger and eyecathching.the method is useful because a picture can be shown of theservice, which is one offer. Nevertheless if it doesnt appeal to thepublic then it will be a waste of money and time. Therefore itscritical that the poster and billboards are designed carefully. Thelocation of the posters and billboards will have great impact on theresponse. This is because if they are not in an eye-catching locationthen not as many people will see them.

Leaflets-Are going to be one of the major tools and I am going to useto promote my service this is because, I will get leaflets put throughthe doors in the local area as well as being given to young and middleaged women in high streets. The method itself is cheap and costeffective.Explanation- I am going to advertise in local newspaper for 1 month soeveryday I am going to give a advert about my nursery, the secondmedia which I am going to use is to advertise in women health andpregnancy magazine, since they come out every month hence one monthbefore my nursery starts I am going to advertise in these magazines,the third media is to give out leaflets in west London basically inEaling because my nursery is in west Ealing so if I give out leafletsin that area then the people will be aware about my nursery. I am alsogoing to have my nurseries website in which all the details will bethere so any one who wants to access it can do so and find out thedetails which they want, this is going to cost me # 2000, hence mytotal cost for advertising will be 5000.

The research of the costs of advertising in different media I haveattached in Appendix 5.

PRODUCTION AND QULAITY ASSURANCE

A first and second floor suite of offices situated on the UxbridgeRoad opposite the Clock Restaurant. The premises have been recentlydecorated and also benefit from new fitted carpet. Ideal forany-professional business such as a solictors. Available immediately.

Site Location (Land)

The above is a reasonable location for me to base my privatechildrens day nursery because its ideally located and canaccommodate 12-20 children. This figure was discovered in my marketresearch. I believe 12-20 children will be enough to cover costs andmake my business a success. Futhermore its based on Uxbridge road andtherefore there are vital bus links. Whats more is that there is afree car park opposite my selected premises.

The premises rent is 10,000 per annum and rates are 300 a month tocover utilities and business rates.

10,000 divided by 12 equals 833

Therefore each month rent will be 833 and 300 rates so in total itwill be 1133 a month.

The plan of my premises is in Appendix 6.

RAW MATERIALS OR EQUIPMENT

E3 There will be several pieces of equipment, which I wouldneed to purchase

A2 before the nursery is opened. I will have an opening budget of3000 to spend

on toys for the children. The toys will be purchased for all ranges. Ihave visited the Early Learning Centre website (www.elc.co.uk) andhave ordered a catalogue as well as printing a few samples which arein appendix 2.To add to that I have registered with the ELC and willobtain 10% discount for each purchase I make from them. All the toysbought will be used to educate and develop coordination skills. Thisis because my market research proved that parents would want theirchildren to learn these skills when attending a private nursery.

I will also need to purchase sitting equipment for the kids as well assmall desks where they can draw and learn to write on. Futhermore Imust buy reasonable stationary such as coloured pencils and paper thatchildren can use while learning and having fun.

For staff I have to buy seating and admin equipment so that they canwork as efficiently as possible. Finally there must be seating in themain reception for the visitors. The seating for the adults and staffplus equipment can be bought from office world which is in appendix 2.The equipment for the kids will have to be bought from differentplace such as ELC.Overall, I believe 800 should be enough to coverthe costs.

However, I will have to allocate another 600 to purchase a computerfor the nursery that will keep details of all the children andemergency contact details. Futhermore, these details will be backed upon paper in a separate file. The computer can be ordered through Dellat (www.dell.co.uk)

The premises is fully carpeted, and the kitchen is fully refurbishedtherefore this will save me money, however, to make the nursery looknicer I will have a few posters and some flowers at the reception andsome showpieces. I believe I will need 100 to cover these costs. Theshow/decorative pieces can be purchased from normal high street shopslike Woolworths.

SERVICE DELIVERY

The diagram above shows the Service Delivery of my day nursery, itsstarts with inputs which includes the premises, it will have somespace where the stock will be kept such as all daily stuff, it willalso include the man hours that is the labour, will also have cash andcapital that is the money coming by my customers, will also includeall the information which the customers require such as prospectuswhich will include all the details and will also have details aboutthe customers service, the next box includes the service process thatis all the services which my nursery provides to its customers, thefirst will be customers satisfaction which is that my staff will makesure that all the customer needs should be satisfied and what allchanges which the customers want should be done so that the customersdo not have any problems, the third box includes the output that isthe number of bookings I will be having in my nursery and then findingout how much profit is my nursery making which will show whether mynursery is doing well, if not then I have to find out what more can bedone so that my nursery does well, the final box includes the outcomethat is are the customers satisfied with the service which my nurseryprovides if not then have to make sure what all the customer wants anddo accordingly.

First Floor:

Office one: will be the main reception area where parents /guardianscan come to drop and pick up their children. There will be areceptionist sitting in the reception and a phone will be kept so thatshe can make appointments with the parents for the bookings and alsoif any parent wants a prospectus or wants to ask any information theycan ask from the receptionist. When the parents come to drop theirkids they will drop them in the receptionist and one of the staff willbe taking them to their rooms from their only. Furthermore there willbe seats that parents can use to sit on if they wish to wait for asmall period. There will be kitchen, which will be used by the staff.

Second Floor:

Will have a room for children aged 0-3 years old and the learningactivities will take place in this area, it will also have room forchildren aged 3-5 years old and the learning activities will takeplace in this area. This will also have a room which will be thelargest area in the premises and will be used for break and lunchtimes as well as there will be a small area where children can leavetheir coats and bags in the morning or lunch boxes.

LABOUR NEEDED, WHAT THEY DO

E3 In my nursery there will be 4 employees including me, I willbe the head who---------------------------------------------------------------------

will be in charge of everything then there will be one assistantmanager who will assist me in the work and there will be two moreassistants who will take care of the kids.-----------------------------------------------------------------

The general rule is that 1 adult can be allocated to a maximum ofkids. However, in my nursery I will have 1 adult to 4 kids (batchproduction due to age group). Therefore at first I will have fouremployees and see if I need to recruit more or reduce the hours ofexisting ones. Four children to 1 employee is reasonable as I feel thechildren will be given more attention and will benefit than they wouldif it were 1 employee to six children.

Each employee will be paid an hourly wage of 6.50phr.This is acompetitive rate because an average employee in a nursery in Ealing ispaid 6 to 8 an hour as I found out in my market research .If anemployee works full time then they will earn:

The Premises must have insurance and be secure at all times. I willhave to have annual insurance policy so that I am fully insured.Futhermore I will have a security alarm so that the police can becalled when intruders break into the nursery.

Below is a quote from an insurance company: www.insuranceservices.c.uk

Call 0808 100 8238 for your free no-obligation survey (www.adt.co.uk)this is the number I called to obtain a quote from ADT to find out howmuch I will be charged. They said: that they will charge me 300 toinstall the alarm and 1.98pence per day, thereafter for monitoringit.

So total = 1.98 times 365= 722.70p per year.

QUALITY ASSURANCE

QUALITY CONTROL-RAW MATERIALS

E3 I have to make sure the parents have been provided with goodservice and the

children are taken good care of then only my business will expand asby giving good service the parents will be happy and will recommendtheir friends and relatives to bring their children to my nursery asthe children are taken good care of.

QUALITY CONTROL-MAUFACTURING

The staff, which I recruit, should be well qualified so that they cantake good care of the children and what all needs to be done should bedone correctly so that the parents are happy with the services whichmy nursery provides, n they should not complain about anything.

QUALITY CONTROL-FINISHED GOODS

Have to make sure that all the things should be done well, thechildren should be taken care of properly so that the parents feelhappy about it. The services are provided well to the parents and alsomake sure the staff looks after the children properly at all times.

I will have three major points of sale. The first one isparents/guardians coming to reception and paying for their children tocome to the nursery. The second one is to go on line and book viaemail. Finally third option is to phone up the nursery and book thechildren in. All these methods will have a batch production linkedwith them. This is because their will be two separate age groups 0to3and 3 to5.

LEGAL CONSTRAINTS

There are several regulations and laws that my business must followwhen recruiting employees from my nursery. The four basic work actsare:

The Race Relations Act 1976

The Sex Discrimination Act 1975

The Disability Discrimination Act 1995

The Equal Pay Act 1970

The Race Relation Act 1976

My business must comply with this act in three different ways this isbecause they are three different types of discrimination that can takeplace. Direct discrimination takes place when one person is treatedmore favourably then someone else. Indirect discrimination takes placewhen it seems that everyone is being treated the same however whenlooking closely it shows that a certain group is not treated the same.Finally Victimization occurs when an employee who has supportedanother employee that has been discriminated by being a witness inhearing is discriminated. My business must make sure that this doesnot happen by paying close attention and each employee is given thechance to comment if they feel that any sort of discrimination istaking or has taken place.

The Sex Discrimination Act 1975

This act is one of the oldest ones that have been introduced. It wasenforced so no sexual discrimination can take place. My businessbelieves in equal opportunities and therefore no discrimination musttake place against staff regarding their sex. My businesss beliefsare that each and every staff member disregarding their sex must betreated the same. Once again I must make sure that none of this takesplace. Employees can put a case forward if they feel any activity,which has taken place, does not comply within the act.

The Equal Act 1970

This is the oldest act out of the four. It was introduced due to womenbeing discriminated for doing the same jobs as men but being paidless. My business makes sure that this does not happen because it paysboth men and women the same hourly rate for the same job.

The Disability Discrimination Act 1995

This act was introduced to protect those with disabilities or aphysical disadvantage, which they may be suffering from. For instanceemployees on a wheelchair will not be able to look after smallchildren or move around continuously.

The Other Regulations are that:

Employees must have completed a full First Aid work

Have no criminal conviction against children.

Be prepared to be inspected by OFSTED, both the employees and thebusiness.

Be registered with national authorities.

Health And Safety

Employees will be given clear talk on Health and Safety when employed.They will be given specific instructions in emergency situations. Theywill also be told that they must keep the premises clean (includingkitchen) and suitable for children. As well as that, they must makesure that there are no dangerous objects that can pose a threat tochildren or themselves.

If the employees do not oblige the above then I will be heldresponsible. Therefore they will either be told to oblige these or notrecruited.

Other factors to be considered are:

Basic Food Hygiene

Suitable for childminders and nursery and school staff, recognised byOFSTED, RIPH certified, this online course is split into bite-sizedmodules that can be completed in your own time from your own PC.

Maternity Practitioner

Suitable for experienced carers wishing to progress into MaternityNannying who have previously had newborn experience or nannies wishingto gain some newborn skills.

Child Protection

Suitable for nursery staff, teachers and childminders this courseincludes

Recognising and Preventing Childhood Illnesses

Suitable for parents and all carers, this 2-hour workshop providesinformation on common aliments, signs and symptoms.

Managing Challenging Behaviour

Suitable for nursery staff, teachers and childminders will help youfind more appropriate and enjoyable ways to manage young children.

Sleep Management

Suitable for parents and all carers, this workshop enables you to havegeneral understanding of common sleep problems and how to preventthem.

Baby Massage

Suitable for parents and all carers, this two hour practical workshopteaches you general massage techniques for soothing childhood ailmentsand assisting you to bond and relax with your new addition.

Information on legislation, signs and symptoms, policies andprocedures.

Explanation of Resources Needed

I would be needing money for all the resources which I will require inorder to run my nursery so listed above are the resources which I willneed starting with premises since I have taken a place on rent so Iwill be paying my rent monthly which will be 1133 per month, then Iwill require some equipments for my office hence have listed that suchas toys, TV , video, then in order to make people aware of mybusiness I will have to do some promotion so I will be spending 5000on doing promotion like advertising in newspapers , magazines and alsoI will be wanting some decorating stuff so for that I will be spending100.

Financial Plan

Now that I have carried out my market research, compiled my marketingplan and have concluded my production plan. I will now go on to myfinancial plan, which consists of five different areas.

Cash Flow Forecast

Balance Sheet

Trading Account

Profit and Loss Account

Appropriation Account

Breakeven

Summary of Costs and Expenses

When conducting my market research I discovered that I shouldaccommodate between 12 to 20 children a week .My market researchshowed me that I should charge in the region of 150 to 250 per week.This rate will include the children attending the nursery full time(five days a week 9am to 6pm). Whats more is that the nursery willfeed the children.

Initially I will charge 150 per child so that the business canbreakeven not struggle to find customers if I was charging 200 to250.I hope to have 12 children signed on through promotion before thenursery opens.

150 multiplied by 12 children= 1800 per week and 200 per month. Thebusiness will have a opening balance of 500 from my personal savingsso that it can over come any small financial difficulties it may faceduring its opening.

The rent for the business premises is 833 a month plus there arerates of 300 a month, so in total it will be 1133 a month.

The other expenses are based on a stationary (e.g. paper penspencils), childrens food. These will vary compared to the number ofchildren I have attending the nursery. This is because more childrenwill result in higher expenses. Overall I hope to have more childrenin the holiday periods (e.g. summer).

Each staff will be paid 250(6.50 an hour) a week and will work 40hours. The nursery is open 45 hours a week and each day consists of 9hours. So staff will be working 8 hours a day with a 1-hour lunchbreak. Overall I wish to have 4 employees and me.

4 employees= 1000 a week wages or 4000 a month. Personally I wish todraw 1000 to 1200 a month and possibly more during busy periods. Iwill have a monthly loan repayment of 250.

Finally I will also have a business account over draft limit of 1500a month from the bank. Therefore if need be, I can brow 1500 a monthto cover expenses.

PROJECTED 12-MONTH CASH FLOW

CASH FLOW FORECAST

E4 The following page will consist of my cash flow forecast, which Ihave

A2 designed for 1 year. Each area of the Cash flow forecast hasbeen explained

above. The main purpose of this cash flow forecast is to help me judgethe amount of cash that would be flowing through the business andwhich areas I may need to focus on more e.g.(reduce costs)furthermoreit can help me observe other areas such as sales and targets that areset at the beginning of the year. Finally the main incentive beingthat the business does face a financial crisis.

CASH FLOW FORECAST

Explanation Cash Flow

The main purpose of this cash flow forecast is to help me judge theamount of cash that would be flowing through the business and whichareas I may need to focus on more e.g.(reduce costs)furthermore it canhelp me observe other areas such as sales and targets that are set atthe beginning of the year. Each month there is a different amount assometimes there will be more spending and somewhere there will beless, apart from the rates, rent and loan rest everything keepsincreasing or decreasing because the rent is fixed and also the loanwhich I have taken from the bank. Inorder to start my business I needa loan hence I will be taking 3000 from the bank as loan and thenwill be paying back 250 each month for 12 months, It is veryessential for me to take loan from the bank as I need money to startmy business, hence I will be paying back the bank each month. I needmoney in the starting only hence will be taking loan in the beginningand then as my business starts then I will be getting money as andwhen I will be having bookings. Overall I believe that my businessdoes have a successful cash flow forecast, however, I must rememberthat its only a forecast and there may be situations that I may havenot considered which I will discuss later on.

_____

Explanation of Annual Budgets

In order to have a successful business I have to allocate a budget formy business hence above I have made a annual budget for my businessfor example how much I will be spending on promotion, how much I willbe paying my staff, monthly rent and also have allocated some amountfor expenses all this is for one year.

Calculation of capital, sales and expenditure budget is in Appendix 5

PROJECTED PROFIT &LOSS

THE PROFIT AND LOSS ACCOUNT

This will help look at how much profit or loss the business makes atthe end of the year. This type of account has three parts linked toit, which are:

Trading Account

Profit and Loss Account

Appropriation Account

TRADING ACCOUNT

The trading account looks at the amount of revenue and overheads thathave taken place .The profit and loss account looks at the net figurefrom the two; it could be either positive or negative number. Finallythe appropriation tax looks at the things like corporation tax.Although I havent actually started to trade my business, I cannothave an accurate profit and loss account. Therefore the results arebased from my cash flow forecast.

APPROPRIATION ACCOUNT

This is the final part of the part of the profit and loss account .Ittakes in to consideration all the taxation and the figure left at theend shows the net profit made by the business. This profit can then beused by the business in a number of ways. Such as giving employeesbonus or saving the profit for any financial crisis that the businessmay go through in the future.

Explanation of Profit and Loss A/c

The Profit and Loss account is very important for all the businessesas it tells you where does your business stand so it is very importantfor my business in order to find out at the end of one year how did mybusiness do in one year and also where does my business stand if youhave made profit then it shows that the business is doing well but ifits a loss then have to think about what all needs to be done so thatthe business does not make any loss. I have calculated my profit andloss at the end of one year my income from clients comes to88200 andI get 500 as additional income so my total income comes to 88700and after taken out all the expenses I make a profit of 2654 and if Itake out tax which is 200 then I am left with 2454 as my profitwhich shows that my business is going to do well.

PROJECTED BALANCE SHEET

BALANCE SHEET

A business uses a balance sheet to show where its revenue is comingfrom and where its going .the balance sheet must balance so that theInland Revenue can see that the business is paying the right amount oftax and not hiding income. My balance sheet will show where my revenuecomes from and where it is spent.

A balance sheet is very important for all the businesss as we can seeat the end of each year where does our business stand hence I havealso made a balance sheet to see where does my business stand, aftercalculating all the things my net assets and my capital comes out tobe equal which shows that my business is going to do well.

BREAKEVEN ANALYSIS

BREAKEVEN

Every single business wants to breakeven at least and then go on tomake a profit. The breakeven chart shows the business how much it hasto sell for it too breakeven (cover it costs). It considers the boththe fixed and variable costs. For my particular business the breakevenchart will show me how many children I must accommodate each week sothat I could cover my costs.

This is the equation used to find the breakeven point:

Per Unit

I am going to charge 150 per week to accommodate each child. I willallow 5 expenses a week for each kid for things such as refreshments.Therefore the contribution will be 145.

This means I have to look after 573 kids each year for my business tobreakeven. Alternatively I have to look after 11 children a week. Thisseems achievable because my market research showed me that I couldaccommodate 12-20 children a week.

E4

Explanation of my Break-Even

A2 I have made a graph above showing my Breakeven that is wherethe sales and

the total costs meet is my break even after calculating I have foundout that I will be looking after 11 children a week which is quitegood and it will be easier for my staff to look after these children,as and when the number of children will increase then I will increasethe number of staff.

FINANCIAL REQUIREMENTS

FINANCE REQUIRED

E4 As mentioned in financial and production plan I will be looking toobtain a

A2 loan of 5000 from the bank. If the bank rejects my application,then I will

consider getting a sleeping partner so that I can apply again forlower amount. I could also find a partner and then half theinvestment. This is because currently I have personal savings of 3500and could use 2500 of this to open my business with my partner. Whendiscussing the plan with my father, he agreed to help whenever hecould so the last report to raise finance would be him. This isbecause he has good credit rating with the bank and can obtain a loanfor my business. I will also require finance for paying my staff andalso to pay for the equipments.

FINANCIAL MONITORING

In order to monitor my finance I will be having a junior clerk whowill be monitoring my accounts at the end of each year to see whetherI have done my accounts properly and if there are any mistakes beenmade then he can rectify them. I will check my cash flow regularly andalso my budgets in order to locate any financial crisis in future andbe prepared for it.

ASSETS AVAILABLE FOR SECURITY

The assets, which are there for security, will be fixture and fittingsand equipment that comes to a total of 8000, all this amount will besecurity for my business, which is quite good as if any problem comesthen I can use these assets.

SERVICE DATA

SERVICE 1 The fourth service will be providing the kids the basiceducation.

SERVICE 2 the second service which I will be giving to the kids ishaving a room for them to sleep , all those kids who will be there thewhole day will be wanting to rest as they will be tired playing wholeday , hence whenever any kid is tired then the childminder can makethem sleep in that room.

SERVICE 3-The third service which I will offer is I will be having aseparate play room in which there will be plenty of toys with whichthe kids can play the childminders are going to assist them.

SERVICE 4- The service which I will be offering will be giving milk tothe kids, whenever any kid is hungry or they want milk then I will begiving them milk

PERSONNEL

SENIOR STAFF- The senior staff will be the assistant manager who isgoing to assist me in the work of the nursery; she will be a qualifiedand experienced childcare professional and will hold a recognisedchildcare qualification including NNEB, PPA, BTec, and NVQ,this staffwill be doing more of work and will be the second person after me.

OTHER STAFF-The other staff will include 2 more people who are goingto have these qualifications as my assistant manager and they willlook after the kids in the nursery, like feeding the kids or playingwith them.

VIABILITY & JUSTIFICATION

VIABILITY OF THE BUSINESS

E5 This project will be successful because it is based onmarket research as I did

primary research that is I got the questionnaires filled from mypotential customers which showed that there is demand for my business, I did some secondary research like with the help of financial timesI was able to learn about the economy as well about the competitors, Iwas also able to get information from the ONS(Office for NationalStatistics) which was quite helpful as it gave me information aboutemployment in Ealing. I also used the internet to do my research asits a valuable research tool and was able to get useful informationabout the market and its competitors; I also used books as I was ableto get ideas on topics such as designing a plan, legal implicationsand recruitment.

FINANCIAL VIALIBILITY OF THE FINANCIAL PLAN

C2 Although my business has yet not started to trade, I can look atmy:

Cash Flow Forecast

Balance Sheet

Trading Account

Profit and Loss Account

Appropriation Account

Breakeven

Financial Ratios

And say that it will be worth me going ahead with my business plan sothat I can start up my private childrens day nursery. This is becausemy market research in marketing plan helped me develop a cash flowforecast. Although there are one or two periods when my business mayhave a negative cash flow, I can overcome this problem with myoverdraft which I have available from the bank. To add that I haveincluded all the expenses and staff wages .My personal drawings/wageswill depend on the amount of trade that takes place. This is becausein busy periods I will draw out more from the business and draw lesswhen its not so busy. In December I have considered giving myemployees a Christmas bonus. This is shown on the cash flow forecastbecause each employee receives a 250 bonus, there are four employeesso in total its 1000 extra for me to pay out. Hence the wage bill forthat month is 5000 and not 4000.Finally my cash flow forecast alsoincludes my loan repayment to the bank. Overall I believe that mybusiness does have a successful cash flow forecast, however, I mustremember that its only a forecast and there may be situations that Imay have not considered which I will discuss later on.

When looking at balance sheet initially I have a positive figure formy net current assets and also my net assets and my capital employedmatch with each other However, the main reason being that myparticular type of business does not hold much stock. Hence I will notown as much assets as another business would. The two major things mybusiness owns is fixture and fittings as well as the equipment. Therewill also be a small amount of food and stationary equipment as mycurrent assets, which is used by employees and to feed the children.Nevertheless I have an overdraft limit with the bank, which I woulduse when I require a small financial boost. The overall figure fortotal assets is positive so once again this proves to me that itsworth going ahead with my financial plan.

The Trading account, Profit and Loss account and Appropriation accountall interrelate with each other. The Trading account for my businessshows that the total income (from cash flow forecast and marketingplan) is much larger than cost of sales. Nevertheless we must alsoconsider other costs such as: rent, rates and utility expenses. Theprofit and loss account provided me with a positive figure once theexpenses were taken away from the total income. From then on I had anet profit figure before tax. The appropriation of the accountdeducted the amount of tax and finally I was left with net profit of2564 so once again it seems that the business can be a success andits worth going ahead with the plan.

My break-even analysis showed me that I need to look after an averageof 12 children a week so that I can cover my expenses and break even.As mentioned before the figure directly interrelates with my marketresearch findings. This is because my market research gives me areasonable demand for the service I am going to provide. If I have anincrease in customers then I will consider employing more employees.Alternatively if the business is going through a rough patch then Iwill reduce the hours for each employee.

The six different financial ratios that I have carried out for mybusiness have showed me the following:

Current Ratio-has showed me that the business owns more assets thenits liabilities (current ratio 1.73). Although my particular type ofbusiness does not hold much stock but the major assests are fixturesand fittings as well as equipment. We must also put the cash in thebank.

Acid Test Ratio-shows that the business can do well because this timestock was excluded hence the end result being 1.50.If the result wasunder 1 then there may have been some doubts with going ahead with thebusiness plan.

Gearing Ratio-shows that the business is 90% dependent on externalfinance. However this will only be for the first year because the loanI have taken out will be paid to the bank and the business should beable to support it and not rely on the external source of finance.

Returns on Capital Employed Ratio-will definitely encourage investorsto invest within the business. This is because my figure of 48% showsthere is an extremely high return. However we must consider that thebusiness only needs 5000 to get started off, an then the followingyear I may just spend 2000 to upgrade the equipment.

Net Profit Margin Ratio- proves that a 2.9% margin is available for mychosen type of business. Its a reasonable net profit margin becausethe calculations include the deduction of all the overheads such asrates and rents, wages as well as other expenses. Alternatively if thenet profit margin was in the region of 0-1.5%. Then I may reconsidermy decision of opening my business.

Gross Profit Margin Ratio-shows that the business has a 45% margin.However, rent and other overheads bring the margin down. Nevertheless,there is still a reasonable amount left over, which has encouraged meto go ahead with my plan.

Obstacles that my business may face

With any business before and after its starts to trade there aresurprises and obstacles, which it may face. Sometimes they arebeneficial to the business while at other times they are harmful to abusiness. I will be looking at obstacles, which will either halt theopening of the business and those, which will affect the business onceit has started to trade in a negative way.

Sources of Finance-As mentioned in financial and production plan Iwill be looking to obtain a loan of 5000 from the bank. If the bankrejects my application, then I will consider getting a sleepingpartner so that I can apply again for lower amount. I could also finda partner and then half the investment. This is because currently Ihave personal savings of 3500 and could use 2500 of this to open mybusiness with my partner. When discussing the plan with my father, heagreed to help whenever he could so the last report to raise financewould before him. This is because he has good credit rating with thebank and can obtain a loan for my business.

Not Enough Customers-My market research showed me that there is areasonable demand for my particular type of service, because itsstill in the growth stage in the

Product life cycle. However, I am not guaranteed a certain amount ofcustomers because there are several factors that can effect peopleusing my service. Futhermore only research showed me that there wasdemand. I will only find out for sure the level of demand once I startto trade. The solution for low turnout is pumping more into promotionand making people hear about my service as well as the value for moneythey will receive if they buy into my service. I will not be loweringprices instantly because if I lower them instantly then it will bevery hard in the future to rise prices back up.

Marketing Campaign Fails-If the marketing campaign fails then I willlook at my existing methods used (leaflets and questionnaires) and seehow effective they were. It may just be that I havent targeted theright type of people at the right place. Alternatively I may have toadapt to new methods such as door-to-door sales.

Employee Leaves-If an employee decides to leave then I will have torecruit another one. This could be very easy, because I may get a goodresponse by advertising in the local paper. Alternatively I may notreceive a good response hence I will have to reconsider theadvertisement methods. I could go to a local job agency or to one,which specialises in child day care jobs.

Dissatisfied Customer-There will be times when a customer may not behappy about the service, which I am providing. Therefore I will traineach staff to handle this situation by taking the customer into aquite place and listen to what his/her complain is. I will look at thecomplain and try to do my best to avoid it happening in the future.Futhermore when the business starts to trade three months in. I mayconsider giving a questionnaire to the customers to find out what theythink of my business.

New Local Competitor-At the moment there are not nay major localcompetitors, therefore, someone may decide to open another day nurserynear to my premises. I will then have to look at holding to on myexisting customers and maximise the level of service. To add that Icould launch another marketing campaign while the new business issetting up and lower my prices for short period so that more peoplehear about my business.

Market Forces-I will not have any control or influences on marketforces. Therefore I will have to adapt to market forces. For instanceif the child day care market is going through a rough patch, then thebusinesses main objective will be to survive and break even.

VIABILITY & JUSTIFICATION

APPROACH TAKEN TO THE CONSTRUCTION OF THE PLAN

E6 In order to plan if my business will be successful or not Idid primary research

and also I did secondary research both these researches helped me alot. I also went to the banks and got their business plan by the helpof which I was able to do my assignment. I also used the Internet todo my research by the help of which I was able to find out about mycompetitors.

JUSTIFICATION FOR THE APPROACH TAKEN TO THE CONSTRUCTION OF THE PLAN

C4 In order to plan if my business will be successful or not Idid primary research

A3 in which I got the questionnaires filled from my potentialcustomers to find

out whether there is a market for my business or not and thosequestionnaires helped me a lot as I was able to find out what are theneeds of my customers and then planned my business accordingly. I alsodid secondary research by the help of which I was able to find aboutmy competitors and whether there is a demand for my business, both theprimary and secondary research helped me a lot. For my secondaryresearch financial times helped me a lot as I was able to learn aboutthe economy as well about the competitors, I was also able to getinformation from the ONS (Office for National Statistics) which wasquite helpful as it gave me information about employment in Ealing. Ialso used the Internet to do my research as its a valuable researchtool and was able to get useful information about the market and itscompetitors; I also used books, as I was able to get ideas on topicssuch as designing a plan, legal implications and recruitment. I alsowent to the banks and got their business plan by the help of which Iwas able to get ideas for my business. I also have prepared my selffor smooth running of the business and made arrangements foralternatives in case of problems such as short of staff, lack offinances, marketing etc.

ALTERNATIVE APPROACHES CONSIDERED FOR THE PLAN

C4 In order to make my business a success I used all the sources Icould use but as

much as we do still we need more to do so that our business is asuccess. Hence I could have done more research in depth and found outmore about my services and done the alternative changes. In case astaff is not there then I will be prepared to have a alternative staffto take over the class so that the smooth running of the business canbe maintained. If on the basis of the cash flow forecast there isshort of finance in future then I can arrange an overdraft facilitywith my bank so that every day running of business is not affected.All the rules keep changing for nurseries hence the research, which Idid, was done before starting my business, but the rules keep changingso now there may be some things, which I have not included in mybusiness.

EVALUATION

EVALUATION OF MY BUSINESS PLAN

LIQUIDITY

C3 The term liquidity means the speed or ease in which the businessesassets can

be turned into cash without suffering any major capital loss. In mybusiness context the only major assets will have, are the equipmentfor the children and staff. This is because unlike some business doesnot hold large sums of stock other than stationary and food for thechildren. Therefore this will mean owing fewer assets. Furthermore thebusiness owning minimal stock will mean that less cash will be tied upin the business.

Now I will look at Current Ratio. This will show me the relationshipbetween the current assets and the current liabilities.

From the figure above we can see that the business is funded 90% byexternal capital. However, this will not be the case as time goes on.This is because the 5000 loan taken out by me is for the equipmentthat will be used by the kids and staff. Therefore, once the loan ispaid back by me then the business will fund itself independently dueto the fact that there will be no shareholders and no loan repaymentsto the bank. Nevertheless, there may be times when I may need to raisecapital for different purposes (e.g. expansion, or financial crisis).

The Return on Capital Employed Ratio -shows how much one can make ifthey invest in the business

The calculation above shows that for every pound invested, youll make0.48p on top so therefore this means that many people will want toinvest in the business due to the high returns, however the mainreason for this high return is because the business only needs 5000to be started of, where in some cases thousands of pounds need to beinvested for a business to open.

The Net Profit Margin Ratio -shows the business how well its coveringits expenses and going on to make a profit. If a business has lowexpenses and high turnover then the higher net profit margin will be.

A 2.9% net profit margin seems very reasonable because it means thatevery pound invested will mean that I make 2.9p (3 pence) profit afterall the expenses except tax. So once again this seems very reasonableand many investors will be encouraged to invest in the business.

The Gross Profit Margin Ratio- shows the amount of profit made onsales turnover. The gross profit margin does not look after otherexpenses.

This is an extremely good gross profit margin because it means that aninvestor will receive nearly 1-1/2 times on their initial investment.However, other things to consider are expenses, rents and rates etc.Which will affect the netprofit. As well as that a high net profitwill result in higher taxation. Therefore the final net profit aftertax will be much lower to the initial gross profit.

Now that I have constructed my business plan I will look back at areaswhere I feel I have done well and areas that could be adapted nexttime round. As mentioned at the beginning of my plan had three ways ofconstructing my business plan:

Form a plan from a bank.

Follow teachers instructions.

Create my own one.

I used ideas from a banks business plan and followed the teachersinstructions to create my own one. I believe this suited me bestbecause if I followed a step-by-step guide then my business plan wouldnot have my own input and I wouldnt have a good enough understandingof my business plan. Futhermore this method allowed the plan to bemore flexible and relevant to my particular type of business. This isbecause each business plan must directly be related to a business andnot just a summary of different businesses. I structured my businessplan in a way so that I can understand all the different aspectsinvolved both internally and externally to my business. However, if Ifollowed a step-by-step guide then I would have not been able to dothis. Finally I was able to communicate with the teacher with a lotmore confidence because I knew my business plan inside out.

The disadvantages from constructing this business plan are thefollowing:

This was my first time that I had constructed a business plan;therefore, I was inexperienced and created common mistakes. To add tothat my project is just a plan and there will be no real cash involvedso this might have decreased the intensity at which the plan was puttogether in. Although my primary research showed me that there was ademand for my particular type of business, I could not expand to greatlengths. The main reason being; time constraints and not having moneyto employ people to carry out my market research. Therefore I had togo out myself and carry it out. It was difficult to find a reasonablesite at first, but when I visited a few estate agents it becameclearer to me and eventually found a suitable site atwww.adamsproperty.co.uk.

I used several sources of information and some were useful thanothers. For instance some Internet sources had the exact data (locallabour market information: www.isc.gov.uk) while other sites hadirrelevant information. I visited

Busy Bee Crche in Hounslow and learnt a lot more about the equipmentand layout needed to start up a private childrens day nursery.

One major positive aspect of my business is that there is very littlemoney tied up in stock, Futhermore the initial investment of 5000should be enough to get the business started and then following yearsI will only need to spend 2000/3000 to upgrade existing equipment. Inmy financial plan I said I would need a 5000 loan to get started.This is because some businesses needed large amounts of start up cashto start trading.

If I were to reconstruct my plan then I would go about it a similarfashion, but make a few changes. For instance I would research mymarket much more intensively which will allow me to produce a muchmore detailed plan. Whats more is that I may discover new thingsabout my business/market, which may encourage or even discourage mefrom going ahead with my plan. I would also concentrate much more onpromotion. And draw a budget for the promotion activities. This isbecause in my plan I did not look at promotion in too much detail.Therefore next time I would concentrate more on the layout ofposters/flyers/leaflets/questionnaires. Finally I would considerresearching a lot more about my area where I am going to trade. Thisis because I have looked at west London in detail but have notresearched Hanwell in great detail.

Overall I believe that my business plan is good enough to obtain loanfrom a bank. This is because my market research showed me that thereis a gap in the market and a good chance of my business succeeding .Asmentioned before I do not need a large amount of capital so once againthis should make my business proposition to the bank even stronger.The fact that I have not a built up credit rating with the bank mayaffect my chances of getting a loan. Nevertheless, I can emphasise thefact that my businesses unique and demand levels are high. Finally Ibelieve that I can go on to succeed with my business and possiblyexpand in the future. Alternatively if my market is declining then Imay diversify into another market.

MARKETING, PRODUCTION AND FINANCIAL ALTERNATIVES

A1 I have described above the various techniques that I haveadopted regarding

my marketing production and finance apart from those mentioned above.

Marketing

I could have for my marketing research got more questionnaires filledwhich would have given me details in depth about my competitors andalso whether there is a demand for my business.

Production

For my production, which is basically my services, which I offer to mycustomers, now I offer two services first one is to feed milk to thekids and the second one is to have a separate room for the kids wherethey can sleep. But other alternatives can be that I could haveoffered them a transport facility that is we could have picked anddropped their kids, which could have been an added value for mycustomers, another service can be that I could have offered snacks tothe kids.

Financial

For the financial part the alternative can be now I have taken loanfrom the bank but instead I could have taken loan either from a familyfriend or a relative. This would have reduced the pressure of payingback the loan with interest on fixed intervals.

If any problem occurred in my business then it would affect my wholebusiness that is it will affect the marketing plan, production planand also financial plan for which then I would be looking foralternatives to solve the problem and bring back things to normalagain.