Adult Day Care Industry Capstone Project

Adult Day Care Industry

ABC Adult Day Care will be a mid-sized company, which will provide adult day care services to the residents of Boston. This mid-sized adult care facility will serve adults aged fifty years and above. It will provide community-based day health services for the elderly and disabled. Services offered include living assistance, nursing, therapy, meals, and social activities. Their services will be secure and safe, presenting the elderly with an excellent place where their caring services will be met. ABC Adult Day Care will be a privately held organization headed by its founder, Ben Stevenson. Mr. Stevenson has extensive experience in strategic business planning. His advanced knowledge and interest in business are the driving force behind his business. A few employees who have extensive experience in adult care fields will support the daily operations of the facility. With the rising rate of inflation, many American families struggle to get quality supplemental care for the elderly. This trend creates the urge for quality care services. In the Hillsborough County, the population growth rate has currently hit twenty percent, leading us to project the potential for market expansion of this industry (Plunkett, 2008).

Reputation, price, certification, and quality services are some of the useful parameters contributing to the overall success of the adult day care industry. ABC Adult Day Care will compete well in the market by providing competitive prices, upholding a good standing with the community they serve, and high quality services. The company will be open for business on January 1, 2014, kicking off with an initial enrollment of twenty customers (Bryan & Rudd, 2011). They anticipate healthy incomes by the close of the first fiscal year and project to triple it by the close of the third year. The company's biggest operating expenses will be compensated according to industry standards for its high-qualified personnel and rent for its facilities during the start-up period. ABC Adult Day Care desires to grow and open new branches elsewhere; this growth is expected to be conservatively financed from existing cash flow as the company progresses. Therefore, ABC Adult Day Care is putting significant investment in the business and seeks to match the amount in the form of a loan (Glassman & Denison, 2011).

Industry Analysis

The adult day care industry is somehow competitive in the Boston region. The area has over two hundred such like facilities. The industry is characterized by two general facility types: the commercial larger style and the typical corporate franchise center. Both facilities are national and regional. Today, the largest adult day care facilities in the U.S. account for thirty percent of the market share. There are also various smaller and locally owned facilities in the area. The largest facilities host at least one hundred adults while locally owned centers host a maximum capacity of twenty adults (IBIS World Report, 2013).

It is evident that the industry is quite competitive. ABC Adult Day Care will engage two strategies for the sake of differentiation. The first will be the pricing strategy where the company's services will be priced at a maximum ten percent less than the larger commercial facilities. The second will be differentiated customer service. A customer-centered culture will be encoded within the entire company. ABC Adult Day Care will spend extra cash to attract and train the best workforce. This is vital because the workers interact with customers and will have the best opportunity to impress them. This will incentivize them to be loyal customers and vocal in telling others about their positive experience about the adult day care (Prieto, 2008).

The Customers

ABC Adult Day Care will focus on two different target customer segments; full-time working couples and drops in customers. Full time working couples segment is expected to account for eighty percent of the company's business. This segment is expanding at a rate of thirty percent a radius of ten miles holds over one hundred potential customers. The drop in the segment will be using ABC Adult Day Care sporadically as the need arises. This segment is expanding at a rate of twenty percent with fifty potential customers (Plunkett, 2008).

Mission

ABC Adult Day Care aims to provide secure and safe adult day care at all times. Tight personal attention to every adult is imperative to the provision of a quality experience for all adults. Therefore, sufficient personnel will be recruited and trained to ensure each adult has the appropriate supervision will in the care facility (Davis & Lynn, 2010).

Keys to Success

Keys for success in this business will be:

I. Quality care

II. Flexible hours

III. Competitive pricing

IV. Maintaining an untarnished and a reputable reputation in the community

Standard Industrial Classification (SIC) Code and NAICS Code

The Standard Industrial Classification (SIC) Code for Adult day care center is 83220101. The NAICS Code for Adult day care center is 624120.

Company Summary

ABC Adult Day Care will be a start-up managed by its founder, Ben Stevenson. The owner has extensive knowledge and experience in the adult care industry. He has likewise maintained an attractive reputation in this industry. Additionally, Ben Stevenson is capable of handling the management and administration areas independently.

Company Ownership

The business will begin as a simple sole proprietorship, owned by the founder. As its operations expand, the owner will think of re-registering as a private limited company to suit the future business needs.

Start-up Analysis

The founder of the company, Ben Stevenson, will handle the daily operations of the business and will consider hiring an experienced set of personnel to help ensure success of the business venture. The start up expenses will be approximately $5,600 inclusive of advertising, legal, and related expenses. An extra amount of $95,000 will be needed as start-up assets. The start-up expenses will be financed by the owner's personal funds and supported by a loan (Davis & Lynn, 2010).

Start-up Requirements

Start-up Expenses

Legal Expenses

Advertising material

Office Equipments

Activity Supplies

Food Supplies

First Aid and related supplies

Sanitary Equipment and supplies

Beddings

Miscellaneous

Minimum start-up cash

5,600

Start-up Assets

Total Cash Required

80, 000

Other Current Assets (vehicle)

15,000

Long-term Assets

0

Total Assets

95,000

Total Requirements

100,600

Company Locations and Facilities

The operations of ABC Adult Day Care will be based in Massachusetts, a suburb region of Hillsborough County, Boston. Initially, the facility will cover two thousand square foot house in a residential neighborhood. It will have a fully fenced yard, to guarantee safety and protection. It will be furnished with quiet rooms for rainy day activities and preparation of meals. In addition, the house will contain books and other entertainment facilities for the elderly (IBIS World Report, 2013).

COMPETITIVE ANALYSIS

The adult day care industry is saturated as a whole. Drawing from the recent U.S. census, the City of Boston is expanding despite the existing adult day care facilities. ABC Adult Day Care intends to meet this local market need. Competitors such as St. Charles boasts of one hundred branches in the United States. The local neighborhood has only three adult day care centers. One is a church-based facility located in the immediate area and is hosted by a local academy, which is miles away. The immediate community does not have any adult caregivers. ABC Adult Day Care will differentiate itself against its local competitors by providing an alternative to the traditional adult day care approaches (IBIS World Report, 2013).

The ABC Adult Day Care Center market strategy will be grounded on the provision of activity-based care environment, which will be used to entertain the elderly. It will provide a community of elderly caregivers with the intent to improve the social and motor skills of the elderly and enable them learn how to cope with aging (Glassman & Denison, 2011). ABC Adult Day Care will be found at the medical plaza as the area has already shown an interest and a need for adult care services. The medical plaza currently has a fitness center and a pediatric office with a clientele that requires adult care services. The company will position itself as the market share leader in adult care services and development offering by penetrating this industry (Kornblum & Smith, 2011).

Main Competitors

XYZ Church Adult Day Care is an already established business in the market with a large church congregation. However, it might not appeal to clients of diverse religious backgrounds and beliefs.

Kick Care Center: it is an already established institution in the area offering adult day care services. However, it is at a disadvantage because it is located outside the middle-income segment. Its building condition is prone to frequent flooding.

SWOT ANALYSIS

Because ABC Adult Day Care Center intends to venture in the adult day care industry, it must conduct a detailed feasibility study. It has employed SWOT analysis in order to evaluate its potential success of opening and operating the business. This analysis focuses on the strengths, weaknesses, opportunities, and threats likely to face the company. SWOT analysis has captured key strengths and weaknesses within the…