Investing in Afterschool

[tampaite]

Hello.

I have been presented with an opportunity to make an investment of between $15K to $30K in an After-school for special needs kids.

The person am looking to invest has 10 years of experience running a preschool and now wants to open her own business with the possibility of opening additional locations. I don't know her personally but was introduced via a business broker.

Apparently, she already has a place in a retail plaza(the place needs to be converted to become an after-school) and this will be located in Miami, FL.

Am new to investing in after-school businesses.

Could someone help me understand what the monthly income assuming we enroll say 20 or 25 kids in the next 2-3 months at this location? Am trying to understand how long would it take my investment to be paid off?

Thanks!

[itlw8]

run

How fast will you lose that money is more like it.

a business that is only open 3 or 3 hours a day after school and only takes children with special needs. Is there a need for this service in your area???? In many places afterschool program work with limited staff because they are school age but I assume special needs would mean a much higher staff ratio

How easy is it to hire people to work 3 hours a day ???

But it comes down to a person you do not know wants to open a business and has NO FUnding to do so. How careful do you think they will be with your money. Money they need to get a small business loan more than likely . So when the business goes under you will be AFTER the bank to collect.

again RUN

[Starburst]

My CD teachers have a saying
"You wont get rich working in the child care field, but its very rewarding"
Its rewarding emotionally when you actually work WITH the kids and see them grow but not financially. Especially with parents who are trying to cut corners to be able to afford daycare in this down economy.

Also that is a limited market and most of those children need one-on-one care and It may be required legally to have someone who has some type of medical training or training in special education (which most mainstream teachers and child care workers do not have). And even if you can find workers with those qualifications they would probably expect to be paid handsomely (especially if they have bills to pay and only work 3 hours a day). Plus, as an added fact- in accordance with the ADA all mainstream child care facilities cannot refuse a child based only on the fact that the child has a mental/physical/developmental disability.

[MrsSteinel'sHouse]

I agree with the others. The elementary school here has had before and after school programs.. the YMCA even took it over at one point. This is using the school building so they weren't playing for a place! And they can't make it float!
I agree with the others.. run!

In order for a before/ after school program to work it has to be tied to a childcare. It is too expensive to hire staff just for that need! As a home provider I do not do school age at all unless they grew up in my program and I feel obligated!

[tampaite]

Thank you all for chiming in and am learning a lot on this forum.

I have asked 6 months sales projection numbers and let's see if the person comes back with it.

[tampaite]

I have asked 6 months sales projection numbers and let's see if the person comes back with it.

I got the 6 month projection for the After-school business opportunity. The projection is for full enrollment which is about 20 kids.

Details below - the numbers seem to work but am not sure if parents are willing to pay this kinda amount every month.

Monthly Expenses:

• Rent : 1200
• Electric : 250
• Water : 100
• Phone : 100
• Insurance : 400
• Misc Expense : 200
• 4 Employees : 3400
• Instructor #1 : 250
• Instructor #2 : 250

Total Monthly Expense: $6150

Monthly Income:

• 20 kids * $650 = 13000

Total Monthly Income: $13000

Total Net Income = $6850

This is ASSUMING that within 2 months the After-school can enroll 20 kids.

As you can see just to break-even, the enrollment has to be at-least 10 kids($650*10 ~ 6500)

My question: Will parents spend $650 every month on After-school program which is not affiliated with any school and parents will have to drop/pick up kids and will this business sustain for the long haul?

Thanks for your responses...

[MyAngels]

Before I would even consider investing in this I would do a lot more homework. I'd want to know what current services are available for these kids? Is there a shortage of services, needs that are not being met? What exactly constitutes "special needs" for your purposes? Once you've defined that, what is the population of "special needs" children that you'll be targeting? Those are just the questions I can think of off the top of my head.

At $650/month, that's $150/week for what amounts to less than 3 hours of care per day (typically, and not counting school vacations and school closures). That would never work here, but that may depend on your area as well.

In my area the support services are many and varied, so there isn't a huge need for any after school care, so it would never fly here, but it could be different where you are.

[Unregistered]

Hello.

I have been presented with an opportunity to make an investment of between $15K to $30K in an After-school for special needs kids.

The person am looking to invest has 10 years of experience running a preschool and now wants to open her own business with the possibility of opening additional locations. I don't know her personally but was introduced via a business broker.

Apparently, she already has a place in a retail plaza(the place needs to be converted to become an after-school) and this will be located in Miami, FL.

Am new to investing in after-school businesses.

Could someone help me understand what the monthly income assuming we enroll say 20 or 25 kids in the next 2-3 months at this location? Am trying to understand how long would it take my investment to be paid off?

Thanks!

I would not do it. Let me tell you why. These things RARELY go well! A lot of parents are unable to afford what this woman is proposing, so that's why they send the kids to the YMCA or after-school programs hosted by their own districts. Some parents will even have neighbors or a co-op or grandparents assist. Then as the child ages to 9-10 yrs of age, they let them be "latch key" kids before they will pay over $600 per month for very part-time care.

Furthermore, you've admitted you do not know this person. How do you know you won't get scammed? And even if not scammed, daycare (as we ALL know) is not a guaranteed service. So you may get NO ONE in the care for several weeks or even months. My job has an ON-SITE daycare and cannot get the ratios they need a lot of the time. So they have had to cancel field trips and cut back part of the program just to stay on top.

I wouldn't do it. I know it sounds tempting and that the grass seems greener, but it always does and then you find out that it's not what it was cracked up to be.

While you may love what you do very much, it's a BAD economy and that means it's a bad idea to do something that has a very high chance of bankrupting you and your family. Doing what you love is wonderful so long as it does not mean doing it for free or for a huge loss.

[Unregistered]

My CD teachers have a saying
"You wont get rich working in the child care field, but its very rewarding"
Its rewarding emotionally when you actually work WITH the kids and see them grow but not financially. Especially with parents who are trying to cut corners to be able to afford daycare in this down economy.

Also that is a limited market and most of those children need one-on-one care and It may be required legally to have someone who has some type of medical training or training in special education (which most mainstream teachers and child care workers do not have). And even if you can find workers with those qualifications they would probably expect to be paid handsomely (especially if they have bills to pay and only work 3 hours a day). Plus, as an added fact- in accordance with the ADA all mainstream child care facilities cannot refuse a child based only on the fact that the child has a mental/physical/developmental disability.

While I agree with your last statement, many regular centers are not experienced enough to take children with CERTAIN disabilities. For example, if a child needs to be fed with a feeding tube, that wouldn't work in the dc my kids go to. She does not know how to do it and even if the parent showed her how, she would not have the time to be able to devote to it with the other kids in care. So in that case, she would have to turn down the parent. She's also too scared to take kids with certain conditions because they are life-threatening. Things like this can be cause for a provider-parent-child relationship not to work. I can see why it's difficult for the parents in these cases to find good care, but at the same time, I think that if they have SA's then they have probably secured care long ago and wouldn't be necessarily looking for someone new.

[Cradle2crayons]

While I agree with your last statement, many regular centers are not experienced enough to take children with CERTAIN disabilities. For example, if a child needs to be fed with a feeding tube, that wouldn't work in the dc my kids go to. She does not know how to do it and even if the parent showed her how, she would not have the time to be able to devote to it with the other kids in care. So in that case, she would have to turn down the parent. She's also too scared to take kids with certain conditions because they are life-threatening. Things like this can be cause for a provider-parent-child relationship not to work. I can see why it's difficult for the parents in these cases to find good care, but at the same time, I think that if they have SA's then they have probably secured care long ago and wouldn't be necessarily looking for someone new.

I have a special needs baby whose mother drives an hour one way just to bring that baby here. First of all, I'm an RN. Not in my capacity here, but it does help my comfort level while I'm taking care of this child. Secondly, not a single center and very few individuals will care for this baby. Before I would think about investing in an after school program for special needs, I would rather invest in a partial day center for these special kids because the under age five special needs babies need care before they ever make it to school. If I didn't care for this baby mom would be trying her best to live off of ssi which is nothing. This mom WANTS to work and provide and is doing it all by herself. She is not a state pay and although the baby does have free to her medical care and a great team of realists, her mom wants more for her than sitting in a one room apartment for her entire life. She wants her to be around other kids because her brain is normal even though her body is broken. As the mom of a medically fragile child myself, we had to barely survive the first five years because NOBODY would watch my daughter the first five years. Not that I could have trusted just anybody anyway. The need for good quality care for these babies before they are age five is great here. I wish I could get funding for a special needs center here. Head start and other places won't keep them. Centers won't keep them. Apparently nobody Ina 150 mile radius of me will keep them.

And when I say my dcg is special needs I mean Mickey j .... Mickey g.... Heart baby.... Torticollis.... Severe scoliosis.... Two failed reflux surgeries.... Failure to thrive.... Aspiration risk.... Non walker... Non crawler... Pterodactyls of the right hand.... Etc etc... Tube fed... Meds through j tube.... Need I continue ?? Lol

And yes... Sometimes her Mickey j pops out and I have to put that ****er back in... That's never fun for either of us!!

[MamaBearCanada]

I got the 6 month projection for the After-school business opportunity. The projection is for full enrollment which is about 20 kids.

Details below - the numbers seem to work but am not sure if parents are willing to pay this kinda amount every month.

Monthly Expenses:

• Rent : 1200
• Electric : 250
• Water : 100
• Phone : 100
• Insurance : 400
• Misc Expense : 200
• 4 Employees : 3400
• Instructor #1 : 250
• Instructor #2 : 250

Total Monthly Expense: $6150

Monthly Income:

• 20 kids * $650 = 13000

Total Monthly Income: $13000

Total Net Income = $6850

This is ASSUMING that within 2 months the After-school can enroll 20 kids.

As you can see just to break-even, the enrollment has to be at-least 10 kids($650*10 ~ 6500)

My question: Will parents spend $650 every month on After-school program which is not affiliated with any school and parents will have to drop/pick up kids and will this business sustain for the long haul?

Thanks for your responses...

Those numbers seem off to me...

Misc expense for 20 special needs kids and 6 PT staff at $200/m seems way too low to cover toilet paper, cleaning supplies/cleaner, maintenance of equipment, new toys, craft supplies, paper towels, garbage bags, hand soap, laundry, paperwork, bulletin boards, activities, medical equipment/supplies, Internet/website, first aid etc

Does the staff ratio of 1-4 meet the needs of a group comprised entirely of special needs children? What kind, if any, medical training/staff would you need? What does that mean for pay?

The instructors (sounds like they should have some educational quaifications) are either very low pay &/or working very minimal hours.... ($250/4/5 = $12.50/DAY or $250/5/5 = $10/DAY)

There is a lot missing that I would want to see covered in a detailed business plan before I invested.

[itlw8]

$600 a month ANd the parents have to leave work to transport their child??? so what does full time childcare cost in your area? $2000 a month?

I see no food on that list do they also bring their own snack?

[Starburst]

While I agree with your last statement, many regular centers are not experienced enough to take children with CERTAIN disabilities. For example, if a child needs to be fed with a feeding tube, that wouldn't work in the dc my kids go to. She does not know how to do it and even if the parent showed her how, she would not have the time to be able to devote to it with the other kids in care. So in that case, she would have to turn down the parent. She's also too scared to take kids with certain conditions because they are life-threatening. Things like this can be cause for a provider-parent-child relationship not to work. I can see why it's difficult for the parents in these cases to find good care, but at the same time, I think that if they have SA's then they have probably secured care long ago and wouldn't be necessarily looking for someone new.

I said that they cannot legally turn a child away for the reason of their disability based only on the fact that they have a disability. But they can legally turn away a child with special needs if:

1. They can prove that they are unable to properly care for them; such as if the child needed constant medical attention that the provider's insurance will not cover or that the provider/teachers are not qualified to do.

2. If they can prove that having the child in the program would cost undue financial burden; like if a child has a wheelchair and the class room is upstairs but the child is too heavy for the teachers to carry and there is no ramp/elevator but building one would put the child care facility in deb. Or if the child needed a specially trained teacher or aid only for them but the facility cannot afford to higher a special trained aid a full-time salary for only one child because then all the money (and then some) would go towards paying the aid, and the facility wouldn't make any money.

[Starburst]

Those numbers seem off to me...

Misc expense for 20 special needs kids and 6 PT staff at $200/m seems way too low to cover toilet paper, cleaning supplies/cleaner, maintenance of equipment, new toys, craft supplies, paper towels, garbage bags, hand soap, laundry, paperwork, bulletin boards, activities, medical equipment/supplies, Internet/website, first aid etc

Does the staff ratio of 1-4 meet the needs of a group comprised entirely of special needs children? What kind, if any, medical training/staff would you need? What does that mean for pay?

The instructors (sounds like they should have some educational quaifications) are either very low pay &/or working very minimal hours.... ($250/4/5 = $12.50/DAY or $250/5/5 = $10/DAY)

There is a lot missing that I would want to see covered in a detailed business plan before I invested.

$600 a month ANd the parents have to leave work to transport their child??? so what does full time childcare cost in your area? $2000 a month?

I see no food on that list do they also bring their own snack?

Also looks like they forgot to add in taxes (for both the business and employee/payroll taxes). Also forgot to add in the start up cost of play equipment and learning activities because I'm sure if parents are paying $600+ a month for special needs children they would expect that you have some developmentally appropriate learning activities for them and the teachers would also be expected to help with therapies. If so they may need to meet with parents/physical therapists or teachers for IEPs after child care hours to discuss the child's progress and things to work on (would the center reimburse the teachers for their time and travel after hours?).

And is she going to also be the director as well as an instructor? If so does she have a director permit or the proper education level to be a director (some states you have to have a BA or an masters)? Would you have to have an RN on the premises (some centers for children who are ill or special needs require this depending on state)? If these teachers are trained in children with special needs I doubt they will want to work for only $250/month (even if its only 3 hours a day). That would barely be able to pay for their home utilities let alone rent/ mortgage, food, and gas to get to work!

Plus all of this figures in only IF you reach your capacity and you would have to have 10 kids to break even. I would do some research to see if there is a demographic of highly special needs kids (who are only school aged) in that region. I honestly think it would make more sense if they also cared for children under Pre-K that are special need during the day (the paycheck would be a little more worth it for the teachers and make more sense business/financial wise as far as filling spots).

But one last thing to remember is that some parents of special needs children want their kids to be mainstreamed as much as possible so they get a chance to be "normal" (whatever that is ). It's also good for the NSN kids because they (hopefully) learn tolerance and acceptance.

[MrsSteinel'sHouse]

At $50 an hour for care, these parents could hire a private nurse for those hours. My bil that is/ was special needs has/ had a care provider in his home.
I can not image that this plan is solid. How many special needs children would there be even available for care?? I can not imagine that there would be 20 with that extreme of issues that they would be willing to pay that. Like I said if it was my child, I would hire in home care. I wouldn't want them in a group setting such as this.