Movie Theater Child Care Business Plan

Introduction

Entrepreneurs are an integral asset to our current economy because they propose new ventures and products that appeal to a diverse audience. Entertainment continues to be a popular source of revenue, so this small business plan recommends movie theaters consider play centers in close proximity or within theaters in order to draw parents to the movies and at the same time provide quality care for their children. 

Executive Summary 

Parents sometimes need temporary breaks from their daily obligations, so childcare centers are viable consumer markets because they provide monitored environments that are safe and fun. Going to the movies is a popular pastime, so a movie theater childcare drop-in service would be ideal because it would allow parents to relax in a comfortable theater and know that their children were close by. Parents and guardians usually have set schedules for their children, so the service would be available from 11 am-7 pm. While reservations would be recommended, Child’s Play Center would also accept drop-ins in order to accommodate spontaneity. 

Child’s Play Center’s environment would be both fun and educational with books, games, movies, and toys. Most importantly, Child’s Play Center would provide a safe environment. All childcare providers will undergo background checks and have state credentials in order to maintain credibility and secure parental trust. 

Based on a consumer market survey, the majority of parents claimed that they would use such a service if it were available. Moreover, the parents responded that they would be more inclined to go to movie theaters if childcare was available.  Thus, this venture is unique and allows future expansion. The future expansion would include other movie theaters across the county. Essentially, if the first play center increases the movie theater’s client base and overall revenue, it would be a selling point for potential investors and future growth. 

Description of the Business

Mission Statement

Want to enjoy the latest flick, but don’t have a babysitter? That’s not a problem! Child’s Play Center aims to offer a safe, secure, and entertaining environment where children ages three through ten can play with their peers, watch movies, read books, or enjoy toys, games, arts, and crafts. It’s cheaper than a babysitter at only $6 dollars per child each hour, and, best of all, parents know their children are only a walking distance away. 

Child’s Play Center’s employees are licensed and friendly care providers who work exclusively with children.  Upon a child’s check-in, our friendly staff records the chosen film and provides parents with a pager in the unlikely case of an emergency or if their child needs to be picked up. In addition, the staff gives parents and their children matching wristbands, so parents are secure in knowing their children will only be able to leave with the adult wearing the corresponding wristband. Children’s safety is our number one goal. 

We welcome drop-ins for all showtimes, but on the weekends, we recommend reservations. While parents are welcome to provide their children with snacks, all children will be given complimentary popcorn and bottled water as refreshments. Contact Child’s Play Center to make a reservation or simply stop by 30 minutes before the movie starts. 

Marketing

In general, the target market for daycare centers is full time working parents who tend to use drop-in services, so the population that would most likely use movie theater childcare would be either single or married with 1 or more children who range in ages 3-10 years old. The consumer marketing survey revealed that only one parent out of 5 had used childcare within a movie theater. However, in 2011, the Market Share Reporter found that the movie theater industry had a value of $12.6 billion.  Concessions accounted for 25%, but drama movies contributed up to 21% of the overall revenue. Adults are usually the typical viewers of dramas, so perhaps this percentage would rise if the theater offered childcare. While mothers and fathers may share in important familial decisions, the Marketing to Moms Coalition (2011) reported: “Moms represent a $2.4 trillion market” (p. 5). With that in mind, the main customer focus for advertising would be mothers.

Incidentally, Harkins Theaters has successfully implemented childcare within their theaters. Business Insights: Essentials (2008) reported “Harkins Theaters is over 300 screens strong and growing” (Harkins Amusement Enterprises, Inc., no pag.). Consequently, it is reasonable to assume the theater has been able to expand because of its popularity amongst parents. Thus, Harkins would be the main competitor of this business venture; however, it is a family-owned business, so their centers would solely exist within their theaters. Essentially, other movie theaters or franchises would benefit from a childcare service, so future advertising would involve pitching Child’s Play Centers to established theaters as part of its expansion. However, for the time being, present advertising would focus on parents and a local theater. 

The consumer marketing survey respondents indicated that the normal price they would consider paying for childcare would range from $10-$15 an hour. Because a movie lasts for approximately 2 hours, and parents pay for that entertainment, $6 per child would be a reasonable fee. Business Insights: Essentials (2008) reported Harkins Amusement Enterprises charges $6 per child. As a new business venture, I wanted to propose the same price ranges.

As with any product or service, businesses ultimately want their customers to develop brand loyalty. The Ai InSite Art Institute (2011) has noted “Parents are…a prime marketing demographic target because… ‘By targeting parents, you’re opening the door for their kids, too’” (no pag.).  However, parents will often want to ensure each family member equally benefits from the product or service. With this in mind, parents may feel guilty when leaving their children behind, so the advertising strategy would emphasize that parents would be in the same building, so it alleviates that guilt, but, at the same time, the advertising would propose to parents that they owe it to themselves to enjoy entertainment in order to maintain their emotional health. Subsequently, if a business operation provided entertainment for children and parents, it would encourage loyalty. 

The Marketing to Moms Coalition (2011) separated mothers into three categories; there are “Millennial Moms,” “generation X Moms,” and “Boomer Moms” (p. 5). The Internet is a valuable resource, so online marketing is essential, and the Marketing to Moms Coalition (2011) reported “variability in the social networking habits of the different mom generational groups” (p. 5). For the most part, Facebook and email are two popular modes of communication. Along with the theater’s traditional advertising, Child’s Play Center will develop a blog, use Twitter, and create a Facebook page. Facebook pages generate interest amongst common audiences, so initial marketing would depend on word of mouth. Moreover, a blog does not require technical skills and can be written by me or the administrative assistant. In order to increase its Search Engine Optimization (SEO), the blog would have movie reviews in order to have specific and popular keywords, so as Internet users searched for a particular movie, the blog would eventually be one of their search results. 

Research Design and Development

Kuratko and Hornsby (2009) have explained: “Business planning forces entrepreneurs to analyze all aspects of their venture and to prepare an effective strategy to deal with the uncertainties that may arise” (p. 75). In this case, this business plan combined existing services, childcare centers, and movie theaters, in order to reach the large target audience of parents. 

Operations Segment 

This business venture would guage the market segment and ask local theater owners if they were interested parties. An ideal theater would be one that frequently showed children’s movies because parents may be regular customers. In addition, the play center would optimally be inside the theater. Depending on the theater’s size, an unused room could be renovated as long as it accommodated 45 people at one time. 

Management 

I would be the owner of Child’s Play Center and have overall responsibility for daily operation management. I realize that many contemporary parents would like to see the latest PG-13 or R rated movies, but they are unable to because of a lack of childcare, the expense of babysitters, or a fear of leaving their children behind. With that in mind, movie theaters in the community would allow parents to have personal time and the security of knowing their children were in a secure yet convenient location.

In addition, all childcare providers will have state credentials and appropriate licenses. As the amount of clients increase, the staff would increase. For the most part, the chain of command would operate as so as the owner, I would be the person the receptionist and administrative assistant or manager communicates with. For the most part, the care providers would communicate amongst themselves if any problem occurred. 

Critical Risks

Successful business plans address potential problems before they happen. Saxton et al. (2010) have found that “embryonic ventures develop through and evolutionary process via the co-evolution of the human, financial, and product dimensions” (p. 18). In this case, the product would be the service, so any risks would involve the location of the movie theater. In addition, the number of children that the service will watch will fluctuate. Ultimately, the service relies on the movie theater’s current customer base. If the particular theater usually serves people without children, a childcare service would be obsolete or rarely used. The worst-case scenario would be a lack of interest in local theaters. However, based on the success rate of Harkins Entertainment, this business venture has potential to succeed, so it is likely that at least one theater would find it as a viable investment. 

Financial Forecasting

In order to create a childcare center within the theater, funding would have to cover costs such as renovation, insurance, furniture and supplies, and employees.  The first source of startup capital is ownership equity. This would be my personal investment into the company that would not need to be paid back in a hurry at any specific date. In regards to the second source of startup capital, I would obtain a loan from a close family member because this option would allow me to obtain the funding quickly without any high interests and at a flexible repayment plan.  Lastly, once the play center is up and running, the third source of startup capital would be internal funds. 

(Proforma graphs omitted for preview. Available via download)

As an estimate, it would be $50,000, at minimum, to cover a renovation, advanced rent, supplies and trained staff. Farrell (2007) noted that “Hard assets–playgrounds, toys, couches and cribs–should run between $300 and $400 per child” (no pag.). However, supplies such as tables and chairs, books, games, movies, and toys can be donated from me, the community, and current moviegoers.  Because the play center will be added to a standing building, land was not included in this equation. In addition, the financial forecasts assume that the movie theater has a vacant room to renovate. 

The first year would likely be the slowest, so the number of children would be approximately 30 children each month and at $6 per hour and per child. In 2014, parents should have knowledge of the service, so it may be necessary to add additional supplies and or hard assets. Furthermore, it is expected that 2015 would see an increase in business; however, the space would continue to provide for 35 children at one time. As the years progress, an additional $10,000 would contribute to 2014 and an additional $20,000 in 2015.

Based on the service, it is not expected to secure additional property or equipment. In addition, Hotta (2013) suggested that the cost of daycare is usually $600 per month, so $7200 represents the yearly total. Farnen ( n.d.) revealed that “The BLS reports that childcare workers employed at child day care services earned average wages of $9.40 per hour or $19,560 per year as of May 2011” (no pag.), so my pay and the full-time staff members would be $19,560. The staff would slowly increase as the client base increases; however, the majority of staff needed would be approximately 7 people. 

Initially, the business would have 4 staff members, 2 full-time and 2 part-time, who were childcare providers, and I would maintain daily operations and administrative duties. In the first year, I estimated that the play center would care for 20 children per day. As the business becomes well known, the amount of clientele will increase, so as an estimate, in 2014, I would project 25 children per day, and in 2015, I anticipate 35 children per day.  

Harvest Strategy

The play center can take profits from its first center to expand into other theaters. Most theaters are franchise opportunities, so it would be reasonable to expect that other franchises would be willing to incorporate this service in their theater once it has been established that it is a profitable juncture. Thus, the strategy would be to create interest for each franchise. In addition, potential harvest opportunities would include national advertisers who want movie screen-based advertising. Also, Casacchia (2007) emphasized that “Cinema advertising across the nation is on the rise, surpassing $500 million in 2005…[because] traditional advertising venues such as television and print [are] loosing [sic] their luster and audience” (no pag.). However, in large part, the more successful the theater, the more success the play center, and future play centers, will have. 

After I secure investors, I plan to be up and running in a year’s time. Hypothetically, the plan would have been set into motion in January of 2013. First and foremost, I would need to secure the capital and location in order to proceed. While the renovation takes place, I would hire staff. After I hire my staff, I would begin advertising. 

Conclusion

Overall, with a dwindling economy, it is difficult to anticipate what consumers will need. However, entertainment continues to be popular. Movie theaters continue to do well in this market, but in order to increase its revenue, theater owners should consider their audience. Parents, especially mothers, determine how their family will spend their money. If a movie theater incorporated a play center within the theater, it would entice parents to the movies and at the same time assure parents that their children would receive quality care.

References

Ai InSite Art Institute. (2011, May 25). The parent trap: Marketing to parents. Ai InSite. Retrieved from http://insite.artinstitutes.edu/the-parent-trap-marketing-to-parents-38516.aspx

Business Insights: Essentials. (2008). Harkins Amusement Enterprises, Inc (T. Grant, Ed.). International Directory of Company Histories, 94. Retrieved from http://bi.galegroup.com/essentials/article/GALE%7CI2501312005/6c007540e141b80cb8dec785f84a5961?u=nm_a_albtechvi

Casacchia, C. (2007). Deal means more national advertisers for Harkins. Phoenix Business Journal. Retrieved from http://www.bizjournals.com/phoenix/stories/2007/02/05/story11.html?page=all

Farnen, K. (n.d.). How much Do employees at a day care make? Global Post: America's New World Site. Retrieved September 2, 2013, from http://everydaylife.globalpost.com/much-employees-day-care-make-7001.html

Farrell, M. (2007, April 5). The fundamentals of running a child care center (B. Nelson, Ed.). Forbes. Retrieved from http://www.forbes.com/

Hotta, L. T. (2013). The Day Care Guide: Day Care Cost. Retrieved August 18, 2013, from Care.com website: http://www.care.com/child-care-day-care-cost-p1145-q165824.html

Kuratko, D., & Hornsby, J. S. (2009). New Venture Management. Upper Saddle River, NJ: Prentice Hall.

Marketing to Moms Coalition. (2011). Marketing to moms coalition state of the American mom 2011 highlights [PDF]. SOAM 2011 Highlights.

"Movie Theater Industry, 2011." (2012) Market Share Reporter. Detroit: Gale. Business Insights: Essentials. Web. 2 Sept. 2013.

Saxton, M. K., Saxton, T., Steen, J., & Verreynne, M. (2010). Failure to advance: Resource logic for early venture failure. Prometheus, 28(1), 15-27. doi: 10.1080/08109021003668620