Day Care free essay sample

In 1990, 7. 2 million mothers with 11. 7 million children under the age of 15 worked either full or part time during non-standard hours. Mothers with children under age 5 have the highest percentage of voluntary non-standard hours. Marketing efforts will remain primarily grassroots using local resources, current families, and churches to promote Bouncy Kids Child Development Center. 3 Introduction Bouncy Kids Child Development Center is a Limited Liability Company (LLC) owned by (CDC Owner). (CDC Owner) has over 15 years in the child care industry and has worked vigorously to provide care for Development Center will operate under a Christian philosophy that children need to be treated with warmth and respect. The children served by Bouncy Kids especially need experiences that will foster physical, social, emotional, and cognitive growth. The atmosphere at Bouncy Kids will be a caring environment to encourage independence, constructive problem solving, positive self-esteem, and improved self-worth. Bouncy Kids Child Care opened for business in 1996 and at that time was licensed for forty children. Currently, the center is licensed for sixty children aged 6 weeks to 6 years. XX children are enrolled at Bouncy Kids . (CDC Owner) started the child development center with the mission to serve inner city, low-income families with quality childcare. She is passionate about the need to assist children in their early childhood development with a stable, enriching and loving environment while their parents are working. She also understands the problems of lower income parents who cannot afford to pay for quality childcare. She has been operating the center from her hearts and passion to help families find personal and financial stability. The owner is now trying to operate their centers in a more business-like manner. 4 Industry Analysis The childcare industry remains essentially a mom-and-pop business ringing up annual sales estimated to be between $10 billion and $35 billion. Although the national chains grew 200% during the 80’s, they still accounted for only 5% of the childcare centers operating nationwide. In 1995, only 9 chains had as many as 24 centers. The rest were much smaller operations, many of hem non-profit or run in a provider’s home. Profit margins in the industry are very slim. The average for-profit daycare center earns 5% over costs. Some franchise operations function at about 7% margins. Information on the costs involved in the daycare industry was found in the 1995 report entitled â€Å"Cost, Quality and Child Outcomes in Childcare Centers†. Because childcare is so labor intensive, labor costs account for 70% of a center’s total expensed costs. Facilities make up 15% of the expended cost budget. However economies of scale can be realized. Total expended costs decline as the number of children served at the childcare center increases. On average, centers with 40 or more full-time equivalent children realized a 10% savings in total cost per child per hour, while centers with 80 full-time equivalent children realized a 20% cost savings. One major emerging trend in the childcare industry according to the Census Bureau’s Report â€Å"What Does It Cost to Mind Our Preschoolers? † is the care of children during non- standard hours. The service sector is projected to have the highest and fastest growing percentage of shift workers at 42%. In 1990, 7. 2 million mothers with 11. million children under the age of 15 worked either full or part time during non-standard hours. Mothers with children under age 5 have the highest percentage of voluntary non-standard hours. In 1991, almost 20% of all full-time workers worked during non-standard hours. Positions requiring non- standard hours, such as nurses, restaurant workers and cashiers, are expected to account for almost 19% of the overall projected growth in employment through the year 2002. As found in the recent study, â€Å"Cost, Quality and Outcomes Study and the Study of Quality in F amily Care and Relative Care†, childcare is one of the lowest paid occupations. A study by the National Committee on Pay Equity (1987) discovered that childcare is the second most underpaid profession, and that the turnover rates are the highest among any industry. Childcare workers often receive few benefits, such as medical and dental insurance and paid 5 time off. A good-quality center is characterized by adequate providers’ wages, education and training, resulting in lower turnover. The national childcare staffing study (1990) found that wages were the most important predictor of quality of care. Adequate pay is necessary to attract childcare workers with necessary education and training to provide children with quality care. High turnover of staff is a concern. The primary reason why people leave their jobs with childcare centers is the low income. 31% of the providers earning $200 or less per week left the occupation during 1990 as compared with 15% for those earning more than that amount. Other factors that influence their choice to leave of stay include: working conditions, increasing demands of parents that can not be met, lack of benefits, personal reasons (retirement or pregnancy) and lack of career opportunities. How children spend their time before and after school is a concern for many parents. According to the Child Care Bulletin (March/April 1995, Issue 2) the average child spends 3 hours a day watching television or playing video games. Other activities include playing with friends, homework and reading. 76% of school-aged children whose mothers work are cared for by 2 or more different childcare arrangements per week. Almost 15% (14. 6%) of children spend some time alone each week, with that percentage increasing with age. Critical childcare factors There are 4 demographic and socio-economic factors that have a strong influence on the childcare industry. They are: †¢ The number of preschool children. †¢ The number of working mothers with preschool children. †¢ The likelihood that parents will select a childcare center over other childcare arrangements. †¢ The financial ability to pay for childcare centers. 6 Number of preschool children . The preschool population has been increasing nationally on a steady basis. Since 1989, over 4-million children have been born annually, and that figure is expected to be similar for 1997. Data from the National Center of Health Statistics indicates that over half of the babies born in 1994 were born to women aged 20 to 29, while a third were born to women in their 30’s. Among women aged 40 to 44, they saw an 8% increase in the number of babies born. Older mothers are more likely to earn more and spend more on their children. This steady growth can be attributed to several factors. One factor involves a higher than anticipated birth rate of immigrant mothers. Another factor is the fertility rates for women in there 30’s are higher than anticipated. Children born to women in their 30’s was 33% in 1988 as compared to 19% in 1976. The trend of women delaying childbirth is expected to continue. The encouraging impacts of this trend for the childcare industry is that women aged 30-34 are more likely to return to work quickly and require childcare services. These mothers have established careers to support their family lifestyles. One factor that could have an impact both positively and/or negatively is the decreasing size of American families. There will be fewer children born to each family, but the overall rate, as stated above, is expected to remain relatively consistent. The good news to the childcare industry is that the shift to later child bearing and smaller families provides a greater number of households with two incomes. These families with two incomes will have more disposable income to spend on their children and the mother will be more inclined to continue to work after the children are born. Number of working mothers with preschool children . The number of mothers with preschool children that are working has risen steadily since the 1960’s. In 1990, 55% of the mothers with children under 6 were working and is expected to increase to 75% by the year 2000. This trend is expected to continue due to a shift in attitudes toward women and working. The Census Bureau reports that the percentage of mothers with infants under 1 year who return to work has increased from 15% in1968 to 51% in 1988. 7 The Study of Early Childcare, by the National Institute of Child Health and Development, found that half of the infants in the study were at childcare at 3 months of age. Over one third of the infants had been in at least 3 different childcare arrangements by the end of their first year. The study also found that the children that entered the childcare at a younger age had mothers who earned more and were less dependant upon income from fathers or other sources. In a 1977 survey, adults were asked if they agreed or disagreed with the statement, â€Å"A working mother can establish just as secure a relationship with her children as a mother who does not work†. In 1977 50% of the adults agreed with the above statement and in 1991 64% agreed. Additionally in 1992 survey of college students, 89% of the women surveyed saw marriage and children as part of their lives before the age of 35. Of the 89%, 97% planned to continue their careers after giving birth and 88% of the men surveyed assumed the women would continue to work after the birth of a child. Likelihood that parents will select a childcare center over other childcare arrangements . The trend for utilizing childcare centers has been increasing steadily since 1965. In 1992, the number of preschool children of working mothers enrolled in childcare centers exceeded the number of children cared for by parents, relatives, nannies, or family daycare providers. The primary choice of working mothers was relatives to care for their children prior to 1990. Today, nearly 1 in 3 children of working mothers attends a childcare center. A major shift has occurred over the last ten years from parents preferring relatives or family daycare to utilizing childcare centers. The following chart illustrates the trend for increasing use of daycare centers/nursery 35% 30% 25% Facility 20% Parents 15% Relatives Non-relatives 10% 5% 8 0% 1977 1985 1990 1991 1993 schools since 1977: The increase in use of daycare centers between married couples (30. %) and single mothers (29. 5%) is very consistent. The drop in 1991 for both married couples and single mothers is attributed to the recession and the lay-offs associated with that recession. Another important factor is the drop in care by the fathers. The number of families, using the father to provide care far the children is again decreasing after an increase in 1991. The primary target market for most daycare franchises is working women between the ages of 25 to 39 with household incomes of $25,000 to $75,000 and higher than average education levels. According to the US Department of Education, 28% of women who work full- time use organized childcare as opposed to 15% by women employed part-time. The same study also determined that families earning over $54,000 per year were 34% more likely to use organized childcare facilities than families having lower monthly incomes. Financial ability to pay for childcare centers . The financial affordability of daycare centers is an issue that many recognize as a problem. The high cost of delivering quality childcare services prices the formal childcare center out of an affordable range for many families. Almost 40% of respondents surveyed felt that they could not afford their current childcare arrangements, or the arrangements they would prefer (American Federation, 1987). Families earning over $45,000 are twice as likely to enroll their children in centers then families with income below $20,000. Household incomes, public subsidies, and employer support are all factors that influence the choice of childcare options. As stated earlier, the higher the household income, the more likely the mother is to continue working after the birth of her child and the more disposable income they have to spend on childcare services. The Government has developed grants to assist low-income families and has also discussed increasing childcare subsidies for low to moderate-income families. Additionally, approximately 2% of American companies with 10 or more employees provide on-site childcare and another 3% provide other childcare subsidiaries. In the business 9 areas, the large corporations (sales over $500 million) are the most likely to support employee childcare. American Demographics According to the US Department of Agriculture estimates that the average cost of raising a child through age 18 is $145,000 in 1995 dollars. % ($13,050) goes toward childcare and educational expenses.