I intend to employ on 3 to 4 employees along with my self and cater for

approximately 12-20 kids once the business has established itself then I may decide
to expand and cater for more children.
THE PRODUCT
I have selected a nursery because there is high demand in the UK as well that there
is a reasonable amount of profit, which can be made if the business is planned out
correctly. One of the main reasons why demand is so high is that more women then
ever before are going to work, and therefore day nurseries provide a suitable
environment for their children to be looked after in.

THE MARKET
One of the main reasons why demand is so high is that more women then ever
before are going to work, and therefore day nurseries provide a suitable
environment for their children to be looked after in.
PRODUCTION
Since my business is basically a service that is a day nursery hence there is no
production involved it is the services, which I provide to my customers. I offer milk
to the kids, if any of the kid needs milk I will be offering them, then there will be a
rest room in which those kids who are tired can sleep in that room, the third service
which I offer is playing, I will be having a room in which all the toys will
be there all the kids can play there, my childminders will play with them, and the
fourth service is giving the kids basic education.

EXPECTED PROFIT
For my business to be successful it is very important that it should make profit , so
at the end of one year I will be making a profit of 2454 which shows that my
business is going to do well, its just the
starting as and when my nursery becomes popular among the people I thing it will
be doing well and making more profit.
FINANCE NEEDED
As mentioned in financial and production plan I will be looking to obtain a 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 for lower amount. I could also find a
partner and then half the investment. This is because currently I have personal
savings of 3500 and could use 2500 of this to open my business with my partner.
When discussing the plan with my father, he agreed to help whenever he could so
the last report to raise finance would before him. This is because he has good credit

rating with the bank and can obtain 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 timings will be from 8 am till 6 pm from
Monday to Friday.
START DATE 1st January 2015
SHORT TERM OBJECTIVE JBswill within the first twelve months of working:
Increase profit by taking in more children in the nursery, and making 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 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 reasonable
demand.

 Employ 2 more additional staff.

MARKET ANALYSIS

MARKET FOR MY PRODUCT

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

Market Size
A total of 12,075 childrens day nurseries in the UK provided 537,450 places for
children between 0 and 5 years in January 2004. Average occupancy for the UK was
85%. Nursery sector capacity has more than
quadrupled between 1990 and 2004, concentrated solely in the independent sector
at a time when local authority provision has been decreasing, though it has started
to grow again.
All this shows that there is a high demand for nurseries One of the main reasons
why demand is so high is that more women then ever before are going to work, and
therefore day nurseries provide a suitable
environment for their children to be looked after in. The parents of children will be
working people and will be basically upper and middle class parents, some of them
will be part time and some will be full
time.
Customers-After analysing the childrens day care market I have come to know that
the children from the age o to 5 can attend private day nurseries. This is because
when children reach the age of 3 in these nurseries they are then taught the
national curriculum.
However, volunteer day nurseries can only provide for children the ages 0 to 3 this
is because they do not teach the children the national curriculum and therefore the
children attend nursery and reception in a primary school.
Parents who want their children to attend a nursery want to have easy access and

do not want to travel too far in the morning to drop their kids off. Hence the
following has to be considered. The target
customers for my nursery will be parents who have got kids aged between 0 and 5
years because they will be the ones who will be willing to put their kids into my
nursery. The people will be those who will be having good incomes so that they are
able to pay for their kid who will be studying in my nursery and also who will be
having good status, they will be basically middle and upper class people who will be
bringing their children in my nursery.
Residential Market-this means that most parents would not use the nursery if it was
more than 5 miles away from their house .As well as that I have to look at the
average income in my area, which I tend to
open my nursery in Ealing and see if the parents can pay the anticipated fees.
Futher more how high is the demand in Ealing for private day nurseries and how
likely is it for the parents to substitute a day nursery for nanny child minder?
Commuting Market-made up of people who will drive past or the nursery when they
are going to work. This is so that it will be convenient for the parents to drop their
children off in the morning and pick them up in the evening. Finally what are the
major transport link near the nursery i.e. bus stop train station.
When looking at results above I can see that Ealing is very densely populated when
compared to other areas in West London. This is good thing for my business
because there is a larger market to target .An
average age for resident living in Ealing is 35.6, this is lower than the countries
average and therefore it could lead to younger parents and younger children
furthermore the number of under 16 years old has
increased in Ealing and hence there will be more children who may be suitable for
the nursery.
London itself is very multicultural society. However; Ealing itself has ethnicity of
41.3%, this means that when marketing my service I will have to launch a
marketing campaign that will attract all ethnicities and cultures. Finally more than
30% of the households do not have access to personal transport i.e. car or van
therefore the location of the nursery must have transport links .For instance
based near a bus stop or densely populated housing area.
Now I will loot at employment figures and an average income to decide what rate I
could charge my customers. Furthermore I will then look at my 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 or part time jobs.

The most popular form of employment in Ealing is in business services. (23.4%) This
then closely followed by the retail
and wholesale sector (21.9%). In Great Britain15.5% of employment is in the
business services sector hence there is a difference of nearly 8% when compared to
Ealing.
There are 12 boroughs in London and only three have higher
employment percentage in retail and wholesale trade than Ealing. This is a
good sign because it means Ealing is not doing to badly on employment. However,
property prices are very high and therefore it means some people can buy a house
and must rent. Furthermore this leads them to have less money to spend and it
could result in my nursery having to reduce rates considerably.

PRIMARY RESEARCH
E1 Questionnaires-For my Primary Research I got the questionnaires filled, as they
are an effective method and allow the business to ask specific questions from the
customers. It can then see what the
response of the customer was before making any judgement. The questions I
designed are specifically related to my service. I got my questionnaires filled from
Ealing high street as my nursery will be in
Ealing only, went to different people and firstly asked them if they have a kid who is
between 0-3 years if they said yes then only I asked them to fill the questionnaires.
The questionnaires and the graphs are
attached in Appendix.
Analysis of QuestionnaireMy questionnaire was based on people who had children aged 0 to 5. Hence
everybody who answered the questions had a child between that age group. If the
candidate did not then their questionnaire was
cancelled, as they were not a suitable for the research I was looking for.
From the people I questioned 45% said they would need a private nursery 5 days a
week, so there is a demand for it.
55% of the people would prefer a better changing facilities and other snacks, along
with this having a safe environment is the most important quality for the parents
followed by keeping child safe and
happy.
At present the parents mostly used the services of Asquith court followed by
Saplings.
Most parents said they would require the services of the nursery in February.

I received a 80% response from parents that they would be interested in sending
their children to a day nursery. The other 20% did not want their children to attend a
private nursery. So overall I can use this
as a big positive because there seems to be high level of interest.
18% of people said that they did not have access to their own transport. I have to
keep this in mind when situating my nursery. This is so that it should have
reasonable transports links, or be accessible 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 if the number of
full time employees increased then it will mean that more people will need some
one to look after their children.
80% of the candidates said they would prefer a day nursery than a nanny to look
after their children. Once again I can use this to my benefit because the majority
would use my service instead of a nanny.
85% of the candidates said they could recommend a friend or a relative who may be
interested in sending their child to a day nursery. This also sounded well because if
customers recommend my service to others it will mean a higher turnover and
possibly more profit for the business.
I received an overwhelming response from candidates saying that sending children
to day nursery was one of the best methods to introduce children to the concept of
learning. A small minority did not agree with us.
9%of the candidates said they would be willing to pay between 0-100 per week for
their children to attend a day nursery. However 21% said they would be willing to
pay 101-200 and 70% of people are willing to pay 201+, so I will be keeping my
price as 201, since 70% of people agree to this price.
Now that I have completed my questionnaire and have analysed it, I believe that
there would be demand for my service and that I should go ahead with opening a
nursery. However social and political topics in the future could have a great
influence to my business.
Face to face Interviews-For my primary research I also had face-to-face interviews
with the customers as I thought it is a useful method to interact with the public, and
find out their views of a nursery in their area.

The Pest analysis stands for:

 Political
Economic
Social
Technological
Political-There are many political factors that can affect the market of a day
nurseries. This is because external factors such as war or terrorist attacks can cause
paranoia amongst the public and they can
loose faith in the services being offered to them. Whats more is that there are
many legal factors that can affect the recruitment for employees. Currently today
an employee at private day nursery must
have several qualification or must have taken certain courses from them to be
legally qualified.
There are several employment polices in the UK which I must follow to operate
legitimately. For instance employment regulations such as the Sex Discrimination
Act are followed worldwide. However different countries have their own age and
minimum wage regulations. I must not break any of these laws otherwise I could
face legal action. The current government is introducing subsidised childcare
costs/benefits
I should follow those subsidies only.
Economic-Currently, the UKS economy is battling its way out of an economic
recession. Therefore with the rate of a familys income and the state of economy
will greatly determine how much I can charge per child. The rate of inflation will also
affect the rate I charge because if prices go up then it will mean that I have to
increase how much I charge.
The amount of import and export will affect the amount of wealth leaving and
entering the UK.Therefore if there is unbalance it will affect my business and how
much I charge.
At the moment an average salary for nursery worker is based in the region 12 to 15
thousand pounds. If there were a shortage of workers or the pay went up then it
would mean that I would have to pay more to a worker and possibly charge
customers extra.
Social-There are many social factors that can affect the looking after of children.
This is because recent topics such as paedophilia and child abuse may put of some

people from putting their children in day

nurseries because they may lose faith.
Some workers who havent got the legal qualifications must not be recruited if
discovered it could become a major media topic and possibly dent the market
heavily.
Recently parents have been advised to spend more time with their children at
young age and do basic learning activities. Parents who dont have time will be
more eager to send their children to a day
nursery so that they can dont miss out on their learning.
Furthermore research (Harralambos and Holborn Sociology themes and perspectives
fifth edition) has proved that more women single parents are going to work than
ever before. As well as that generally more women are going to work than ever
before. Therefore their children would require a place to be looked after in. Finally
family values have changed dramatically, in previous years most familys had a
strong bond and these days some families dont have a strong enough bond. For
instance strong bonds grandchildren being looked after by their grandparents .Yet
these days this is not always the case hence
parents have to find other alternatives.
Population Growth
Since around 1650, the world human population has grown massively, at an
increasing rate until recently, from some size of the order of 500 million, to over 6
billion now.
Demographic Transition
In the industrialised or developed world, during this period of growth, national
populations have largely completed going through what is called the demographic
Transition. The UK population is projected to increase from 59.6 million in 2003 to
65.7 million in 2031. Population growth is expected to continue beyond that date,
peaking around 2050 at nearly 67 million
and then gradually starting to fall. All this shows that with the increase in population
there will be increase in the number of kids hence 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 new toys if any new

toys or any equipment is being introduced then the nursery has to adopt that
because no parent would want there child to be using old fashioned toys or
equipment.
THE COMPETITION
Day Nurseries are more in demand than ever before. Therefore many small 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 see that the market
leader is Asquith Court. It occupies 60 nurseries in 1999 and its main rival is
Kinderquest who has 38 nurseries. Busy bees are another name to watch out for
because it has 23 nurseries yet expanding regularly.
All of the nurseries listed above occupy children aged from 0-5 because they all
teach by the National Curriculum and are inspected by OFSTED.
TARGET CUSTOMERS
C1 The target customers for my nursery will be parents who have got kids aged
between 0 and 5 years because they will be the ones who will be willing to put their
kids into my nursery. The children will be
basically from upper class and middle class parents who will be coming in my
nursery as the rates, which I have, are reasonable which both these class of parents
can pay.
LIKELY DEMAND
C1 As after doing my questionnaires I can see that there is likely demand for my
A1 service as all the questionnaires I have got filled are from candidates who have
Kids aged between 0 and 5 years.
12 MONTHS PROJECTED SALES
Marketing Objectives Marketing objectives are very important for every business as
they reflect and contribute to the achievement of the overall business objectives
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 reasonable

demand.

Employ 2 more additional staff.

After conducting my market research I have come to a conclusion that
there is reasonable demand for the type of business I am planning to
open. This is because in my questionnaire I have managed to establish
the fact that parents both single and married parents are willing to
send there to a private day nursery.
The market itself is in the growth stage and has not yet matured. This
is useful towards my business because it shows that there is a larger
chance for the business to be successful than it would be when
entering a matured market.
I found out in my market research that Salaries in London were higher
than anywhere else in the country; once again this meant that more
people could afford to pay rates, which I am going to charge.
My market research also showed me that small and medium sized
businesses could also be targeted because some employees may have to
limit their hours of work so that they can look after their children.
However, they may extend their hours of work if they sent their
children to my private day nursery.
The major competitors in my market are: Asquith Court, Busy Bees and
Princess. They can be found on my list of competitors, which I found
when conducting my market research. I will try to look at how they do
things and which methods they use and then use the best ones for my
nursery.
Finally I have discovered the major political economic social and
technological factors that affect my business when operating
successfully. What s more is that there are some factors which I have
no 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 be
achieved 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 reasonable
demand.
Once the business has established its name it will mean repeat
business form existing customers and the customers introducing
friends. Futher more a good reputation may also result in competitors
customers coming to my nursery.
It s essential for my business to break even otherwise it will result
in bankruptcy, further more the main incentive of the business is to
make a profit and this is only be achieved once the business break
evens and progresses further.
Having small promotion campaign in local areas will result in raising
awareness 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 build
good relationship bond with the workers and not need to readjust
regularly. Futhermore the business will run more efficiently with a
stable work force because staff will be more experienced and have good
relationship with each other.
After a year the business will be well established and the major goal
would be to increase the number of children. This will also result in
increasing market share and possibly making more profit. If there is
an excessive demand then I may also consider expand the business and
opening another branch or alternatively expanding the existing one if
possible. Hopefully this too, will result in a larger market share and
more 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 strategy
for my business. This is because the strategy will help me target
certain 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 impact
on the customers. This is because each P will determine to some extent
how much money my business takes in.
E2 Product-My particular product is a service .The service is
accommodating
C1 children aged between 0to5.Futhermore,once they reach the age of 3
they will
be taught by the national curriculum.
Throughout their stay the children will be developing their
coordination skills and learning the alphabet as well as numbers. Each
child will have a chance to sit down with a member of staff once a
week and have one to one with them. This could range from private
reading to games and discussing problems or issues.
There will be events in the school holidays such as painting and trips
for kids aged 3+. As well as those parents who wish to come in at
some point to watch their children learn are most welcome.
I will try to look at teaching methods used by competitors and see
which methods can be useful to me .The nursery will open in the
morning at 7:30 am so that children can be dropped in the morning by

their parents. However the learning itself will start from 9 am .The
nursery will close at 6pm.The long operating hours will allow more
flexibility 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 educating
activities. However, lunch times and breaks will allow them to recover
and have rest.

The Product Life Cycle

A product life cycle shows the four stages that all products go
through in their lifetime. However the amount of time they take to get
to each stage and how long they stay there depends on the level of
success 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 the
market and wants potential customers to hear about it. It tries to
raise awareness by focusing mainly on the four Ps (Product, Pricing,
Distribution, Promotion). My business has already passed from the
growth stage as there are a number of day nurseries which people are
aware of hence my nursery will be new in the market but people already
know about it.

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

Maturity
The maturity stage is when the product has reached its peak. However
now it looks to remain there with high and regular sales with existing
customers. My business is at the growth stage since its new in the
market hence it will need time to come to the maturity stage.
Decline
The decline stage is when the products demand falls and is not wanted
by many. At times the product might be taken of the market due to poor
rate of success. Since my business is new hence its at the growth
stage so after 6 months only I can say where does my business stand.
[IMAGE]
Flowchart: Preparation: Day Nurseries Market
[IMAGE]

The day Nursery market is reached the growth period and has not yet by
far matured; this is because demand for day nurseries is growing
rapidly day-by-day. Mainly because more single parents and women are
going to work hence they need a place for their children to be looked
after in. Furthermore there is a shortage in some parts of the UK for
day nurseries. Its passed through the introduction period because day
nurseries are chosen over nannies today as I found out in my market
research; because children can learn and play at the same time.
I will look around my local area and see where the most suitable
location would be to base my day nursery. Whats more is that day
nurseries face indirectcompetion from Crches. For instance some
offices, gyms and leisure places have special areas to look after
children while the parents can be alone.
On the whole I still believe that the Nursery still has few years to
go until it can mature, as well as that if events such as sexual
harassment or poor learning for children take place in a day nurseries
then it could mean it will face decline period.
SWOT Analysis
This method is used to find Strengths, Weekness, Opportunities and

Threats within my business. Futhermore I can see which areas are doing
well and where improvements can be made. It also allows me to hunt for
nay opportunities that may be around.
Strengths-The fact that I have drawn up a business plan for my
business will allow me to form a base for all the different aspects
that I may come across when planning my business. Whats more is that
the market research that I have conducted will help me greatly, due to
the fact that I will have a better understanding of the market and the
hazards that lie in it as well as the opportunities. I have a good
understanding regarding other areas of business that I have learnt in
my other units; this too should be very helpful .My market is in the
growth section in the product life cycle, therefore I may come across
more opportunities and chances of success than I would if my market
was matured.
Weaknesses-With any new businesses there are areas, which will affect
the rate of success. For instance entering the new market is always
difficult and can sometimes result in business not establishing them
properly and possibly going bankrupt. It will take time for me to gain
a reasonable amount of customers because some aspects of the
promotional campaign may not be as successful. The competitors whom I
am competing against will hold a strong share in the market hence it
will be complex to compete against them directly in the early stages
of the business. Therefore my main objective would be to establish the
business and breakeven.
Opportunities-As mentioned before, my market has not yet matured and
so it will be easier to find or attract customers than it would be in
a matured or declining market. More women and single parents going out
to work which would also allow me to explore the market and possibly
gain more customers. Furthermore I can approach employers or employees
and make them aware about the service that I provide which could be
useful in the future.
Threats-New businesses face the threat of not covering their costs and
can sometimes dig themselves deep holes. I will be cautious regarding
this issue and therefore will only go ahead with the business if there
is a reasonable chance of success. In addition to this my competitors
will also be a threat to the business. Current affairs such as child
abuse and pedophilia may put people off from sending their children to
day nurseries.
In conclusion to the SWOT analysis above I can conclude on the fact

that there will be a considerable amount of threats and weaknesses,

which I must also make sure that the strengths and opportunities are
maximized to make the business stronger.
Ansoff Matrix
Ansoffs Matrix revolves around four different catrgories. Each
category tells the business what should be its next move. This is
because the four stages: market Penetration, Product Development,
Market Development and Diversification lead the business to another
direction.
Market Penetration-is selling a larger quantity to the existing
customers of the business. This is not applicable to my business as my
business is selling the current product to the new customers.
Product Development-is introducing new products to the business
existing customers. This is also not applicable to my business as my
business is selling the existing product to the new customers.
Market Development-is selling the current products to new customers. I
will be starting a new product hence I will be selling an existing
service 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 the
current product to new customers.
A diagram to show Ansoffs Matrix:
[IMAGE]
I will be starting a new product hence I will be selling an existing
service 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 on
to penetrate the market by reducing the price and trying to expand and
increasing the number of children.Futhermore I may choose to diversify
in another market if my current market fails, or I see a gap in
another market.
Distribution & Place - Goods and services are often available in many
E2 places depending on the demand by the consumers. My particular
service is

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

primary
research (questionnaire) resulted in a promising response.
The site itself will be split up into different areas. For instance a
play area for the ids, learning area, lunchtime break area, toilets
and seating area and fire exit.
To add to that flooring will be carpet and the nursery itself will
have brightly coloured walls so that it appeals to the children.
The seating area will have cushions on which the children can sit on
and there will be area in the kitchen, which will accommodate any food
or drink bought in by the children. However, the children will be
provided 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 learning
with a cost. Families who
C1 are on low income may not be able to afford it. However, I will try
to charge
A2 below my competitors rates and try to encourage more
people to put there
children in my Day Nursery.
Some day nurseries charge per week and I will start off doing the same
however, if need to be I may charge per session and make sure that the
highest quality is offered to both the parents and children. In result
the business will build up a good reputation, this. Once the business
has regular customer then I may become more flexible during holiday
periods.
The amount I charge will also depend on the number of kids there are
to a worker. This is because if there are only one or two kids to a
worker, then the price for each kid will be high. However, if there
are 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 there
learning and coordination skills. This is because if each child has
his/her own mini computer then the rates charged will be higher than

if 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 that
this type of market is in the growth period, therefore there is
reasonable demand for the service I am going to provide.
Promotion-Without promotion not many people will hear the service I am
E2 offering. Therefore its absolutely essential that I choose the
best methods to
C1 promote the business and the business name. However, I must
consider the
cost and justify it against the effect it will have on the business.
For instance it will be pointless to do random leaflets, mainly
because most people will not be interested in the service being
offered .I must also remember that as the opening date is coming
closer, much more money is pumped into marketing since I would want
people to hear the business. Hear are some of the methods that are
available to me.
Television-The adverts are a very useful method because it will give
me a chance to show the internal view of the nursery. However, I will
not be using this method because it will cost too much and not be
effective enough. This is because the advert will be seen nationally,
however my business is based in West London, and those who see advert
in other areas such as Manchester will not be able to use the service
as they live to far away.
Internet-This method has become common in the last few years. This is
because in the previous years not many people used the
Internet.However, when advertising on the Internet will use graphics
of toys and bright colours to make it attractive as well as have an
e-mail link and telephone number for booking or enquires. A website is
often cheap to set up and extremely useful. Therefore I will consider
this to be one of the main marketing tools to promote the business.
Newspapers and Magazines-In the early stages of the business I may
consider advertising in pregnancy magazines or womens health
magazines. This is because as my market research proved earlier on
that more women are going out to work than ever before. Therefore
their children require a place to be looked after in. Overall I think
I will use this method at some stage.

Radio-adverts are useful when they are to the point and get the
message across to the listener. I will not be using this in the early
stages of the business, however, I could use this method once I carry
out extra market research and discover what radio stations my
potential customers listen to.
Billboards and Posters-Are one of the slightly cheaper methods. The
two are very similar however billboards are much bigger and eye
cathching.the method is useful because a picture can be shown of the
service, which is one offer. Nevertheless if it doesnt appeal to the
public then it will be a waste of money and time. Therefore its
critical that the poster and billboards are designed carefully. The
location of the posters and billboards will have great impact on the
response. This is because if they are not in an eye-catching location
then not as many people will see them.
Leaflets-Are going to be one of the major tools and I am going to use
to promote my service this is because, I will get leaflets put through
the doors in the local area as well as being given to young and middle
aged women in high streets. The method itself is cheap and cost effective.
Explanation- I am going to advertise in local newspaper for 1 month so
everyday I am going to give a advert about my nursery, the second
media which I am going to use is to advertise in women health and
pregnancy magazine, since they come out every month hence one month
before my nursery starts I am going to advertise in these magazines,
the third media is to give out leaflets in west London basically in
Ealing because my nursery is in west Ealing so if I give out leaflets
in that area then the people will be aware about my nursery. I am also
going to have my nurseries website in which all the details will be
there so any one who wants to access it can do so and find out the
details which they want, this is going to cost me # 2000, hence my
total cost for advertising will be 5000.
The research of the costs of advertising in different media I have
attached in Appendix 5.
PRODUCTION AND QULAITY ASSURANCE

A first and second floor suite of offices situated on the Uxbridge

Road opposite the Clock Restaurant. The premises have been recently
decorated and also benefit from new fitted carpet. Ideal for
any-professional business such as a solictors. Available immediately.

Site Location (Land)

The above is a reasonable location for me to base my private
childrens day nursery because its ideally located and can
accommodate 12-20 children. This figure was discovered in my market
research. I believe 12-20 children will be enough to cover costs and
make my business a success. Futhermore its based on Uxbridge road and
therefore there are vital bus links. Whats more is that there is a
free car park opposite my selected premises.
The premises rent is 10,000 per annum and rates are 300 a month to
cover utilities and business rates.
10,000 divided by 12 equals 833
Therefore each month rent will be 833 and 300 rates so in total it
will 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 would
need to purchase
A2 before the nursery is opened. I will have an opening budget of
3000 to spend
on toys for the children. The toys will be purchased for all ranges. I
have visited the Early Learning Centre website (www.elc.co.uk) and
have ordered a catalogue as well as printing a few samples which are
in appendix 2.To add to that I have registered with the ELC and will
obtain 10% discount for each purchase I make from them. All the toys
bought will be used to educate and develop coordination skills. This
is because my market research proved that parents would want their
children to learn these skills when attending a private nursery.
I will also need to purchase sitting equipment for the kids as well as
small desks where they can draw and learn to write on. Futhermore I
must buy reasonable stationary such as coloured pencils and paper that
children can use while learning and having fun.
For staff I have to buy seating and admin equipment so that they can

work as efficiently as possible. Finally there must be seating in the

main reception for the visitors. The seating for the adults and staff
plus equipment can be bought from office world which is in appendix 2
.The equipment for the kids will have to be bought from different
place such as ELC.Overall, I believe 800 should be enough to cover
the costs.
However, I will have to allocate another 600 to purchase a computer
for the nursery that will keep details of all the children and
emergency contact details. Futhermore, these details will be backed up
on paper in a separate file. The computer can be ordered through Dell
at (www.dell.co.uk)
The premises is fully carpeted, and the kitchen is fully refurbished
therefore this will save me money, however, to make the nursery look
nicer I will have a few posters and some flowers at the reception and
some showpieces. I believe I will need 100 to cover these costs. The
show/decorative pieces can be purchased from normal high street shops
like Woolworths.
SERVICE DELIVERY
The diagram above shows the Service Delivery of my day nursery, its
starts with inputs which includes the premises, it will have some
space where the stock will be kept such as all daily stuff, it will
also include the man hours that is the labour, will also have cash and
capital that is the money coming by my customers, will also include
all the information which the customers require such as prospectus
which will include all the details and will also have details about
the customers service, the next box includes the service process that
is all the services which my nursery provides to its customers, the
first will be customers satisfaction which is that my staff will make
sure that all the customer needs should be satisfied and what all
changes which the customers want should be done so that the customers
do not have any problems, the third box includes the output that is
the number of bookings I will be having in my nursery and then finding
out how much profit is my nursery making which will show whether my
nursery is doing well, if not then I have to find out what more can be
done so that my nursery does well, the final box includes the outcome
that is are the customers satisfied with the service which my nursery
provides if not then have to make sure what all the customer wants and
do accordingly.
First Floor:

Office one: will be the main reception area where parents /guardians
can come to drop and pick up their children. There will be a
receptionist sitting in the reception and a phone will be kept so that
she can make appointments with the parents for the bookings and also
if any parent wants a prospectus or wants to ask any information they
can ask from the receptionist. When the parents come to drop their
kids they will drop them in the receptionist and one of the staff will
be taking them to their rooms from their only. Furthermore there will
be seats that parents can use to sit on if they wish to wait for a
small 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 learning
activities will take place in this area, it will also have room for
children aged 3-5 years old and the learning activities will take
place in this area. This will also have a room which will be the
largest area in the premises and will be used for break and lunch
times as well as there will be a small area where children can leave
their 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 will

be the head who
---------------------------------------------------------------------

will be in charge of everything then there will be one assistant

manager who will assist me in the work and there will be two more
assistants who will take care of the kids.
----------------------------------------------------------------The general rule is that 1 adult can be allocated to a maximum of
kids. However, in my nursery I will have 1 adult to 4 kids (batch
production due to age group). Therefore at first I will have four
employees and see if I need to recruit more or reduce the hours of
existing ones. Four children to 1 employee is reasonable as I feel the
children will be given more attention and will benefit than they would
if it were 1 employee to six children.

Each employee will be paid an hourly wage of 6.50phr.This is a

competitive rate because an average employee in a nursery in Ealing is
paid 6 to 8 an hour as I found out in my market research .If an
employee works full time then they will earn:
The Premises must have insurance and be secure at all times. I will
have to have annual insurance policy so that I am fully insured.
Futhermore I will have a security alarm so that the police can be
called 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 how
much I will be charged. They said: that they will charge me 300 to
install the alarm and 1.98pence per day, thereafter for monitoring
it.
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 good
service and the
children are taken good care of then only my business will expand as
by giving good service the parents will be happy and will recommend
their friends and relatives to bring their children to my nursery as
the children are taken good care of.
QUALITY CONTROL-MAUFACTURING
The staff, which I recruit, should be well qualified so that they can
take good care of the children and what all needs to be done should be
done correctly so that the parents are happy with the services which
my 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, the
children should be taken care of properly so that the parents feel
happy about it. The services are provided well to the parents and also

make sure the staff looks after the children properly at all times.
I will have three major points of sale. The first one is
parents/guardians coming to reception and paying for their children to
come to the nursery. The second one is to go on line and book via
email. Finally third option is to phone up the nursery and book the
children in. All these methods will have a batch production linked
with them. This is because their will be two separate age groups 0to3
and 3 to5.
LEGAL CONSTRAINTS
There are several regulations and laws that my business must follow
when recruiting employees from my nursery. The four basic work acts
are:
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 is
because they are three different types of discrimination that can take
place. Direct discrimination takes place when one person is treated
more favourably then someone else. Indirect discrimination takes place
when it seems that everyone is being treated the same however when
looking closely it shows that a certain group is not treated the same.
Finally Victimization occurs when an employee who has supported
another employee that has been discriminated by being a witness in
hearing is discriminated. My business must make sure that this does
not happen by paying close attention and each employee is given the
chance to comment if they feel that any sort of discrimination is
taking or has taken place.
The Sex Discrimination Act 1975
This act is one of the oldest ones that have been introduced. It was
enforced so no sexual discrimination can take place. My business
believes in equal opportunities and therefore no discrimination must

take place against staff regarding their sex. My businesss beliefs

are that each and every staff member disregarding their sex must be
treated the same. Once again I must make sure that none of this takes
place. 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 women
being discriminated for doing the same jobs as men but being paid
less. My business makes sure that this does not happen because it pays
both 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 a
physical disadvantage, which they may be suffering from. For instance
employees on a wheelchair will not be able to look after small
children 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 the
business.
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. They
will also be told that they must keep the premises clean (including
kitchen) and suitable for children. As well as that, they must make
sure that there are no dangerous objects that can pose a threat to
children or themselves.
If the employees do not oblige the above then I will be held
responsible. Therefore they will either be told to oblige these or not
recruited.

Other factors to be considered are:

Basic Food Hygiene
Suitable for childminders and nursery and school staff, recognised by
OFSTED, RIPH certified, this online course is split into bite-sized
modules that can be completed in your own time from your own PC.
Maternity Practitioner
Suitable for experienced carers wishing to progress into Maternity
Nannying who have previously had newborn experience or nannies wishing
to gain some newborn skills.
Child Protection
Suitable for nursery staff, teachers and childminders this course
includes
Recognising and Preventing Childhood Illnesses
Suitable for parents and all carers, this 2-hour workshop provides
information on common aliments, signs and symptoms.
Managing Challenging Behaviour
Suitable for nursery staff, teachers and childminders will help you
find more appropriate and enjoyable ways to manage young children.
Sleep Management
Suitable for parents and all carers, this workshop enables you to have
general understanding of common sleep problems and how to prevent
them.
Baby Massage
Suitable for parents and all carers, this two hour practical workshop
teaches you general massage techniques for soothing childhood ailments
and assisting you to bond and relax with your new addition.
Information on legislation, signs and symptoms, policies and
procedures.

Explanation of Resources Needed

I would be needing money for all the resources which I will require in
order to run my nursery so listed above are the resources which I will
need starting with premises since I have taken a place on rent so I
will be paying my rent monthly which will be 1133 per month, then I
will require some equipments for my office hence have listed that such
as toys, TV , video, then in order to make people aware of my
business I will have to do some promotion so I will be spending 5000
on doing promotion like advertising in newspapers , magazines and also
I will be wanting some decorating stuff so for that I will be spending
100.
Financial Plan
Now that I have carried out my market research, compiled my marketing
plan and have concluded my production plan. I will now go on to my
financial 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 should
accommodate between 12 to 20 children a week .My market research
showed 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 will
feed the children.
Initially I will charge 150 per child so that the business can
breakeven not struggle to find customers if I was charging 200 to
250.I hope to have 12 children signed on through promotion before the

nursery opens.
150 multiplied by 12 children= 1800 per week and 200 per month. The
business will have a opening balance of 500 from my personal savings
so that it can over come any small financial difficulties it may face
during its opening.
The rent for the business premises is 833 a month plus there are
rates of 300 a month, so in total it will be 1133 a month.
The other expenses are based on a stationary (e.g. paper pens
pencils), childrens food. These will vary compared to the number of
children I have attending the nursery. This is because more children
will result in higher expenses. Overall I hope to have more children
in the holiday periods (e.g. summer).
Each staff will be paid 250(6.50 an hour) a week and will work 40
hours. The nursery is open 45 hours a week and each day consists of 9
hours. So staff will be working 8 hours a day with a 1-hour lunch
break. Overall I wish to have 4 employees and me.
4 employees= 1000 a week wages or 4000 a month. Personally I wish to
draw 1000 to 1200 a month and possibly more during busy periods. I
will have a monthly loan repayment of 250.
Finally I will also have a business account over draft limit of 1500
a month from the bank. Therefore if need be, I can brow 1500 a month
to cover expenses.
PROJECTED 12-MONTH CASH FLOW
CASH FLOW FORECAST
E4 The following page will consist of my cash flow forecast, which I
have
A2 designed for 1 year. Each area of the Cash flow forecast has
been explained
above. The main purpose of this cash flow forecast is to help me judge
the amount of cash that would be flowing through the business and
which areas I may need to focus on more e.g.(reduce costs)furthermore
it can help me observe other areas such as sales and targets that are
set at the beginning of the year. Finally the main incentive being

that 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 the
amount of cash that would be flowing through the business and which
areas I may need to focus on more e.g.(reduce costs)furthermore it can
help me observe other areas such as sales and targets that are set at
the beginning of the year. Each month there is a different amount as
sometimes there will be more spending and somewhere there will be
less, apart from the rates, rent and loan rest everything keeps
increasing or decreasing because the rent is fixed and also the loan
which I have taken from the bank. Inorder to start my business I need
a loan hence I will be taking 3000 from the bank as loan and then
will be paying back 250 each month for 12 months, It is very
essential for me to take loan from the bank as I need money to start
my business, hence I will be paying back the bank each month. I need
money in the starting only hence will be taking loan in the beginning
and then as my business starts then I will be getting money as and
when I will be having bookings. Overall I believe that my business
does have a successful cash flow forecast, however, I must remember
that its only a forecast and there may be situations that I may have
not considered which I will discuss later on.

_____
Explanation of Annual Budgets
In order to have a successful business I have to allocate a budget for
my business hence above I have made a annual budget for my business
for example how much I will be spending on promotion, how much I will
be paying my staff, monthly rent and also have allocated some amount
for 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 at
the end of the year. This type of account has three parts linked to
it, which are:
Trading Account
Profit and Loss Account
Appropriation Account
TRADING ACCOUNT
The trading account looks at the amount of revenue and overheads that
have taken place .The profit and loss account looks at the net figure
from the two; it could be either positive or negative number. Finally
the appropriation tax looks at the things like corporation tax.
Although I havent actually started to trade my business, I cannot
have an accurate profit and loss account. Therefore the results are
based from my cash flow forecast.
APPROPRIATION ACCOUNT
This is the final part of the part of the profit and loss account .It
takes in to consideration all the taxation and the figure left at the
end shows the net profit made by the business. This profit can then be
used by the business in a number of ways. Such as giving employees
bonus or saving the profit for any financial crisis that the business
may go through in the future.

Explanation of Profit and Loss A/c

The Profit and Loss account is very important for all the businesses
as it tells you where does your business stand so it is very important
for my business in order to find out at the end of one year how did my
business do in one year and also where does my business stand if you
have made profit then it shows that the business is doing well but if
its a loss then have to think about what all needs to be done so that
the business does not make any loss. I have calculated my profit and
loss at the end of one year my income from clients comes to88200 and
I get 500 as additional income so my total income comes to 88700
and after taken out all the expenses I make a profit of 2654 and if I
take out tax which is 200 then I am left with 2454 as my profit
which 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 coming
from and where its going .the balance sheet must balance so that the
Inland Revenue can see that the business is paying the right amount of
tax and not hiding income. My balance sheet will show where my revenue
comes from and where it is spent.

A balance sheet is very important for all the businesss as we can see
at the end of each year where does our business stand hence I have
also made a balance sheet to see where does my business stand, after
calculating all the things my net assets and my capital comes out to
be 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 to
make a profit. The breakeven chart shows the business how much it has
to sell for it too breakeven (cover it costs). It considers the both
the fixed and variable costs. For my particular business the breakeven
chart will show me how many children I must accommodate each week so
that 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 will
allow 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 to
breakeven. Alternatively I have to look after 11 children a week. This
seems achievable because my market research showed me that I could
accommodate 12-20 children a week.
E4

Explanation of my Break-Even
A2 I have made a graph above showing my Breakeven that is where
the sales and
the total costs meet is my break even after calculating I have found
out that I will be looking after 11 children a week which is quite
good 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 increase
the number of staff.
FINANCIAL REQUIREMENTS
FINANCE REQUIRED
E4 As mentioned in financial and production plan I will be looking to
obtain 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 for
lower amount. I could also find a partner and then half the
investment. This is because currently I have personal savings of 3500
and could use 2500 of this to open my business with my partner. When
discussing the plan with my father, he agreed to help whenever he
could so the last report to raise finance would be him. This is
because he has good credit rating with the bank and can obtain a loan
for my business. I will also require finance for paying my staff and
also to pay for the equipments.
FINANCIAL MONITORING
In order to monitor my finance I will be having a junior clerk who
will be monitoring my accounts at the end of each year to see whether
I have done my accounts properly and if there are any mistakes been
made then he can rectify them. I will check my cash flow regularly and
also my budgets in order to locate any financial crisis in future and
be prepared for it.
ASSETS AVAILABLE FOR SECURITY
The assets, which are there for security, will be fixture and fittings

and equipment that comes to a total of 8000, all this amount will be
security for my business, which is quite good as if any problem comes
then I can use these assets.
SERVICE DATA
SERVICE 1 The fourth service will be providing the kids the basic
education.
SERVICE 2 the second service which I will be giving to the kids is
having a room for them to sleep , all those kids who will be there the
whole day will be wanting to rest as they will be tired playing whole
day , hence whenever any kid is tired then the childminder can make
them sleep in that room.
SERVICE 3-The third service which I will offer is I will be having a
separate play room in which there will be plenty of toys with which
the kids can play the childminders are going to assist them.
SERVICE 4- The service which I will be offering will be giving milk to
the kids, whenever any kid is hungry or they want milk then I will be
giving them milk
PERSONNEL
SENIOR STAFF- The senior staff will be the assistant manager who is
going to assist me in the work of the nursery; she will be a qualified
and experienced childcare professional and will hold a recognised
childcare qualification including NNEB, PPA, BTec, and NVQ,this staff
will 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 going
to have these qualifications as my assistant manager and they will
look after the kids in the nursery, like feeding the kids or playing
with them.
VIABILITY & JUSTIFICATION
VIABILITY OF THE BUSINESS
E5 This project will be successful because it is based on
market research as I did
primary research that is I got the questionnaires filled from my

potential customers which showed that there is demand for my business

, I did some secondary research like with the help of financial times
I was able to learn about the economy as well about the competitors, I
was also able to get information from the ONS(Office for National
Statistics) which was quite helpful as it gave me information about
employment in Ealing. I also used the internet to do my research as
its a valuable research tool and was able to get useful information
about the market and its competitors; I also used books as I was able
to get ideas on topics such as designing a plan, legal implications
and recruitment.
FINANCIAL VIALIBILITY OF THE FINANCIAL PLAN
C2 Although my business has yet not started to trade, I can look at
my:
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 so
that I can start up my private childrens day nursery. This is because
my market research in marketing plan helped me develop a cash flow
forecast. Although there are one or two periods when my business may
have a negative cash flow, I can overcome this problem with my
overdraft which I have available from the bank. To add that I have
included all the expenses and staff wages .My personal drawings/wages
will depend on the amount of trade that takes place. This is because
in busy periods I will draw out more from the business and draw less
when its not so busy. In December I have considered giving my
employees a Christmas bonus. This is shown on the cash flow forecast
because each employee receives a 250 bonus, there are four employees
so in total its 1000 extra for me to pay out. Hence the wage bill for
that month is 5000 and not 4000.Finally my cash flow forecast also

includes my loan repayment to the bank. Overall I believe that my

business does have a successful cash flow forecast, however, I must
remember that its only a forecast and there may be situations that I
may have not considered which I will discuss later on.
When looking at balance sheet initially I have a positive figure for
my net current assets and also my net assets and my capital employed
match with each other However, the main reason being that my
particular type of business does not hold much stock. Hence I will not
own as much assets as another business would. The two major things my
business owns is fixture and fittings as well as the equipment. There
will also be a small amount of food and stationary equipment as my
current assets, which is used by employees and to feed the children.
Nevertheless I have an overdraft limit with the bank, which I would
use when I require a small financial boost. The overall figure for
total assets is positive so once again this proves to me that its
worth going ahead with my financial plan.
The Trading account, Profit and Loss account and Appropriation account
all interrelate with each other. The Trading account for my business
shows that the total income (from cash flow forecast and marketing
plan) is much larger than cost of sales. Nevertheless we must also
consider other costs such as: rent, rates and utility expenses. The
profit and loss account provided me with a positive figure once the
expenses were taken away from the total income. From then on I had a
net profit figure before tax. The appropriation of the account
deducted the amount of tax and finally I was left with net profit of
2564 so once again it seems that the business can be a success and
its worth going ahead with the plan.
My break-even analysis showed me that I need to look after an average
of 12 children a week so that I can cover my expenses and break even.
As mentioned before the figure directly interrelates with my market
research findings. This is because my market research gives me a
reasonable demand for the service I am going to provide. If I have an
increase in customers then I will consider employing more employees.
Alternatively if the business is going through a rough patch then I
will reduce the hours for each employee.
The six different financial ratios that I have carried out for my
business have showed me the following:
Current Ratio-has showed me that the business owns more assets then
its liabilities (current ratio 1.73). Although my particular type of

business does not hold much stock but the major assests are fixtures
and fittings as well as equipment. We must also put the cash in the
bank.
Acid Test Ratio-shows that the business can do well because this time
stock was excluded hence the end result being 1.50.If the result was
under 1 then there may have been some doubts with going ahead with the
business plan.
Gearing Ratio-shows that the business is 90% dependent on external
finance. However this will only be for the first year because the loan
I have taken out will be paid to the bank and the business should be
able to support it and not rely on the external source of finance.
Returns on Capital Employed Ratio-will definitely encourage investors
to invest within the business. This is because my figure of 48% shows
there is an extremely high return. However we must consider that the
business only needs 5000 to get started off, an then the following
year I may just spend 2000 to upgrade the equipment.
Net Profit Margin Ratio- proves that a 2.9% margin is available for my
chosen type of business. Its a reasonable net profit margin because
the calculations include the deduction of all the overheads such as
rates and rents, wages as well as other expenses. Alternatively if the
net profit margin was in the region of 0-1.5%. Then I may reconsider
my 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 me
to go ahead with my plan.
Obstacles that my business may face
With any business before and after its starts to trade there are
surprises and obstacles, which it may face. Sometimes they are
beneficial to the business while at other times they are harmful to a
business. I will be looking at obstacles, which will either halt the
opening of the business and those, which will affect the business once
it has started to trade in a negative way.
Sources of Finance-As mentioned in financial and production plan I
will be looking to obtain a 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 for lower amount. I could also find
a partner and then half the investment. This is because currently I
have personal savings of 3500 and could use 2500 of this to open my
business with my partner. When discussing the plan with my father, he
agreed to help whenever he could so the last report to raise finance
would before him. This is because he has good credit rating with the
bank and can obtain a loan for my business.
Not Enough Customers-My market research showed me that there is a
reasonable demand for my particular type of service, because its
still in the growth stage in the
Product life cycle. However, I am not guaranteed a certain amount of
customers because there are several factors that can effect people
using my service. Futhermore only research showed me that there was
demand. I will only find out for sure the level of demand once I start
to trade. The solution for low turnout is pumping more into promotion
and making people hear about my service as well as the value for money
they will receive if they buy into my service. I will not be lowering
prices instantly because if I lower them instantly then it will be
very hard in the future to rise prices back up.
Marketing Campaign Fails-If the marketing campaign fails then I will
look at my existing methods used (leaflets and questionnaires) and see
how effective they were. It may just be that I havent targeted the
right type of people at the right place. Alternatively I may have to
adapt to new methods such as door-to-door sales.
Employee Leaves-If an employee decides to leave then I will have to
recruit another one. This could be very easy, because I may get a good
response by advertising in the local paper. Alternatively I may not
receive a good response hence I will have to reconsider the
advertisement 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 be
happy about the service, which I am providing. Therefore I will train
each staff to handle this situation by taking the customer into a
quite place and listen to what his/her complain is. I will look at the
complain and try to do my best to avoid it happening in the future.
Futhermore when the business starts to trade three months in. I may
consider giving a questionnaire to the customers to find out what they
think of my business.

New Local Competitor-At the moment there are not nay major local
competitors, therefore, someone may decide to open another day nursery
near to my premises. I will then have to look at holding to on my
existing customers and maximise the level of service. To add that I
could launch another marketing campaign while the new business is
setting up and lower my prices for short period so that more people
hear about my business.
Market Forces-I will not have any control or influences on market
forces. Therefore I will have to adapt to market forces. For instance
if the child day care market is going through a rough patch, then the
businesses 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 I
did primary research
and also I did secondary research both these researches helped me a
lot. I also went to the banks and got their business plan by the help
of which I was able to do my assignment. I also used the Internet to
do my research by the help of which I was able to find out about my
competitors.
JUSTIFICATION FOR THE APPROACH TAKEN TO THE CONSTRUCTION OF THE PLAN
C4 In order to plan if my business will be successful or not I
did primary research
A3 in which I got the questionnaires filled from my potential
customers to find
out whether there is a market for my business or not and those
questionnaires helped me a lot as I was able to find out what are the
needs of my customers and then planned my business accordingly. I also
did secondary research by the help of which I was able to find about
my competitors and whether there is a demand for my business, both the
primary and secondary research helped me a lot. For my secondary
research financial times helped me a lot as I was able to learn about
the economy as well about the competitors, I was also able to get
information from the ONS (Office for National Statistics) which was
quite helpful as it gave me information about employment in Ealing. I

also used the Internet to do my research as its a valuable research

tool and was able to get useful information about the market and its
competitors; I also used books, as I was able to get ideas on topics
such as designing a plan, legal implications and recruitment. I also
went to the banks and got their business plan by the help of which I
was able to get ideas for my business. I also have prepared my self
for smooth running of the business and made arrangements for
alternatives in case of problems such as short of staff, lack of
finances, marketing etc.
ALTERNATIVE APPROACHES CONSIDERED FOR THE PLAN
C4 In order to make my business a success I used all the sources I
could use but as
much as we do still we need more to do so that our business is a
success. Hence I could have done more research in depth and found out
more about my services and done the alternative changes. In case a
staff is not there then I will be prepared to have a alternative staff
to take over the class so that the smooth running of the business can
be maintained. If on the basis of the cash flow forecast there is
short of finance in future then I can arrange an overdraft facility
with my bank so that every day running of business is not affected.
All the rules keep changing for nurseries hence the research, which I
did, was done before starting my business, but the rules keep changing
so now there may be some things, which I have not included in my
business.

EVALUATION
EVALUATION OF MY BUSINESS PLAN
LIQUIDITY
C3 The term liquidity means the speed or ease in which the businesses
assets can
be turned into cash without suffering any major capital loss. In my
business context the only major assets will have, are the equipment
for the children and staff. This is because unlike some business does
not hold large sums of stock other than stationary and food for the
children. Therefore this will mean owing fewer assets. Furthermore the
business owning minimal stock will mean that less cash will be tied up

in the business.
Now I will look at Current Ratio. This will show me the relationship
between the current assets and the current liabilities.
From the figure above we can see that the business is funded 90% by
external 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 equipment
that will be used by the kids and staff. Therefore, once the loan is
paid back by me then the business will fund itself independently due
to the fact that there will be no shareholders and no loan repayments
to the bank. Nevertheless, there may be times when I may need to raise
capital for different purposes (e.g. expansion, or financial crisis).
The Return on Capital Employed Ratio -shows how much one can make if
they invest in the business
The calculation above shows that for every pound invested, youll make
0.48p on top so therefore this means that many people will want to
invest in the business due to the high returns, however the main
reason for this high return is because the business only needs 5000
to be started of, where in some cases thousands of pounds need to be
invested for a business to open.
The Net Profit Margin Ratio -shows the business how well its covering
its expenses and going on to make a profit. If a business has low
expenses and high turnover then the higher net profit margin will be.
A 2.9% net profit margin seems very reasonable because it means that
every pound invested will mean that I make 2.9p (3 pence) profit after
all the expenses except tax. So once again this seems very reasonable
and many investors will be encouraged to invest in the business.
The Gross Profit Margin Ratio- shows the amount of profit made on
sales turnover. The gross profit margin does not look after other
expenses.

This is an extremely good gross profit margin because it means that an

investor 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 profit
will result in higher taxation. Therefore the final net profit after
tax will be much lower to the initial gross profit.

Now that I have constructed my business plan I will look back at areas
where I feel I have done well and areas that could be adapted next
time round. As mentioned at the beginning of my plan had three ways of
constructing 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 teachers
instructions to create my own one. I believe this suited me best
because if I followed a step-by-step guide then my business plan would
not have my own input and I wouldnt have a good enough understanding
of my business plan. Futhermore this method allowed the plan to be
more flexible and relevant to my particular type of business. This is
because each business plan must directly be related to a business and
not just a summary of different businesses. I structured my business
plan in a way so that I can understand all the different aspects
involved both internally and externally to my business. However, if I
followed a step-by-step guide then I would have not been able to do
this. Finally I was able to communicate with the teacher with a lot
more confidence because I knew my business plan inside out.
The disadvantages from constructing this business plan are the
following:
This was my first time that I had constructed a business plan;
therefore, I was inexperienced and created common mistakes. To add to
that my project is just a plan and there will be no real cash involved
so this might have decreased the intensity at which the plan was put
together in. Although my primary research showed me that there was a
demand for my particular type of business, I could not expand to great
lengths. The main reason being; time constraints and not having money
to employ people to carry out my market research. Therefore I had to
go out myself and carry it out. It was difficult to find a reasonable
site at first, but when I visited a few estate agents it became
clearer to me and eventually found a suitable site at
www.adamsproperty.co.uk.
I used several sources of information and some were useful than
others. For instance some Internet sources had the exact data (local

labour market information: www.isc.gov.uk) while other sites had

irrelevant information. I visited
Busy Bee Crche in Hounslow and learnt a lot more about the equipment
and layout needed to start up a private childrens day nursery.
One major positive aspect of my business is that there is very little
money tied up in stock, Futhermore the initial investment of 5000
should be enough to get the business started and then following years
I will only need to spend 2000/3000 to upgrade existing equipment. In
my financial plan I said I would need a 5000 loan to get started.
This is because some businesses needed large amounts of start up cash
to start trading.
If I were to reconstruct my plan then I would go about it a similar
fashion, but make a few changes. For instance I would research my
market much more intensively which will allow me to produce a much
more detailed plan. Whats more is that I may discover new things
about my business/market, which may encourage or even discourage me
from going ahead with my plan. I would also concentrate much more on
promotion. And draw a budget for the promotion activities. This is
because in my plan I did not look at promotion in too much detail.
Therefore next time I would concentrate more on the layout of
posters/flyers/leaflets/questionnaires. Finally I would consider
researching a lot more about my area where I am going to trade. This
is because I have looked at west London in detail but have not
researched Hanwell in great detail.
Overall I believe that my business plan is good enough to obtain loan
from a bank. This is because my market research showed me that there
is a gap in the market and a good chance of my business succeeding .As
mentioned before I do not need a large amount of capital so once again
this should make my business proposition to the bank even stronger.
The fact that I have not a built up credit rating with the bank may
affect my chances of getting a loan. Nevertheless, I can emphasise the
fact that my businesses unique and demand levels are high. Finally I
believe that I can go on to succeed with my business and possibly
expand in the future. Alternatively if my market is declining then I
may diversify into another market.
MARKETING, PRODUCTION AND FINANCIAL ALTERNATIVES
A1 I have described above the various techniques that I have
adopted regarding

my marketing production and finance apart from those mentioned above.

Marketing
I could have for my marketing research got more questionnaires filled
which would have given me details in depth about my competitors and
also whether there is a demand for my business.
Production
For my production, which is basically my services, which I offer to my
customers, now I offer two services first one is to feed
ilk to the
kids and the second one is to have a separate room for the kids where
they can sleep. But other alternatives can be that I could have
offered them a transport facility that is we could have picked and
dropped their kids, which could have been an added value for my
customers, another service can be that I could have offered snacks to
the kids.
Financial
For the financial part the alternative can be now I have taken loan
from the bank but instead I could have taken loan either from a family
friend or a relative. This would have reduced the pressure of paying
back the loan with interest on fixed intervals.
If any problem occurred in my business then it would affect my whole
business that is it will affect the marketing plan, production plan
and also financial plan for which then I would be looking for
alternatives to solve the problem and bring back things to normal
again.