BUSINESS DESCRIPTION

Erin's Sitters is a quality, structured, children's sitting business for school-aged children between ages 6 and 12. Erin's Sitters located in Silver Spring, Md., provides child sitting services to the residents of Longwood Park on weekends, Saturday and Sunday, from 1 to 5 p.m. or from 5 to 10 p.m., by appointment only and on holidays by special agreement, except Christmas. Erin's Sitters offer after-school services for two hours from 4:30 to 6:30 p.m. Monday through Thursday to Longwood Park residents.

As an alternative to after-school programs or unattended children, staff meet children at the school bus stop, escort them home, help with/monitor homework, serve a light snack, and/or supervise children until their parents arrive. The weekend service includes outdoor activities within the neighborhood when the weather is nice, serving light snacks, playing games, monitoring Internet access and down-time activities.

Description of Service and Operating Hours
Service Description
Erin's Sitters, a quality child-sitting business for residents of Longwood Park, offers a structured program that is both educational and fun. Services and activities include 1) meeting and escorting children from the bus stop when school is in session, 2) assisting with homework, 3) making and serving before-dinner snacks, 4) monitoring play time, and 5) supervising children until parents arrive. Weekends focus on outdoor activities within the neighborhood, such as bike riding, in-line skating, basketball, etc.; quiet time, which consists of reading, board games, electronic games, Internet games and monitoring with parent's permission; and television and movie viewing with parents' consent and approval.

Operating Hours
After-school child-sitting services are offered Monday through Thursday only from 4:30. to 6:30 p.m., except holidays, which require a special agreement. In addition to the after school services, Erin's Sitters offers weekend child-sitting for parents who want a break from daily routines, on Saturday from 1 to 5 p.m. or from 7 to 10 p.m.; and on Sunday from 4 to 7p.m.

Business Location
Erin's Sitters is located in Longwood Park, Silver Spring, Md.; however, because it is a child-sitting business, the services are offered to residents of Longwood Park directly at their homes.

MARKETING

Advertising/Promotions
Erin's Sitters uses a variety of media to promote the business. Fliers are the primary way to reach residents with school-aged children. These fliers are distributed door-to-door and by a direct-mailing campaign twice annually. Since there are only about 30 families in the neighborhood who may want to use the service, the cost of a direct mailing campaign has been minimal, i.e., 30 families x $0.37 equals $11.10. In addition to the direct mail and the door-to- door campaigns, Erin's Sitters Web Site offers an agreement form that families may download or print out to complete and fax or mail. There are no costs associated with maintenance of the web site, since it is a pull-down menu button on Erin's mother's Web Site; Erin pays a monthly fee of $20.00, which equals $240 annually, toward maintenance of the web site.

In addition to door-to-door distribution, direct mail campaigns and e-business, Erin's Sitters markets and promotes the service by placing fliers on bulletin boards in community centers, recreational centers and schools; and distributing fliers to students living in Longwood Park who ride the school bus.

During several Home Owners’ Association meetings, Erin and her partner Jerrod Entzminger conducted focus groups to determine residents' interest in the services offered by Erin's Sitters. Eighty percent of the families with school-aged children said that they were interested in using or learning more about Erin's Sitters. As a result of the focus-group sessions, the business has the commitment of four families who are interested in using the service and two additional families who have expressed an interest in learning more about Erin and the business. While these families are less than the 30 percent market share that Erin had hoped to recruit, these potential clients represent 20 percent of the total child-sitting market in Longwood Park, a fairly good market share.

COMPETITION

Direct Competition
Since Erin's Sitters is the only child-sitting business presently operating at Longwood Park, there are no direct competitors in the immediate market that Erin has selected. However, in Tanglewood which is less than three-quarters of a mile away, there are two baby-sitting businesses currently operating with whom Erin's Sitters must compete directly: Kay Toddlers and Bits and Bundles.

Kay Toddlers is a child day-care service that specializes in providing day care to toddlers ages 2 to 4. This business has been operating for nearly four years and targets working parents in Tanglewood only. Kay Toddlers appears to have captured 50 percent of the child care services in the Tanglewood area and at this time does not appear to be interested in expanding into Longwood Park. Bits and Bundles, like Kay Toddlers, operates in Tanglewood but offers child day care services to newborns, infants and toddlers up to age 2. Bits and Bundles has been operating for nearly two years and has captured about 25 percent of the newborn, infant and toddler market in Tanglewood. Recent advertisements indicate that Bits and Bundles has moved into the Longwood Park area but, like in Tanglewood, their target market is newborn to age 2.

While both businesses may offer a degree of competition because each could expand into the market which Erin's Sitters has targeted, Erin's Sitters is in an excellent position to capture 30 percent or more of the market, despite potential competitors, with an aggressive, targeted advertising campaign for its select market. Furthermore, there is a possibility of Erin's Sitters picking up a portion of the child-sitting market for children ages 6 to 12 in Tanglewood since neither Kay's Toddlers nor Bits and Bundles serve these markets.

Indirect Competition

Lafayette Elementary School on Fairland Road is the only program that may indirectly compete with Erin's Sitters through its after-school program. Lafayette offers a structured classroom environment designed to assist students in completing homework assignments and planned activities with the guidance of teachers and qualified tutors.

While parents may prefer the structured, controlled environment of Lafayette's after-school program, the convenience of Erin's Sitters is a selling point because parents will not have to detour to pick up their children on their way home. What's more, the price for the services of Erin's Sitters is less than the annual cost of the after-school program at Lafayette Elementary School. This, too, is a selling point for Erin's Sitters, as well as its weekend child-sitting services. Neither Lafayette Elementary School nor the direct competitions, Kay's Toddlers and Bits and Bundles, offer weekend child-sitting in Longwood Park or Tanglewood; as a consequence, Erin's Sitters is in an excellent position to compete effectively with these businesses and the after school program by penetrating the weekend child-sitting market in Tanglewood.

MANAGEMENT

Personnel
Erin's Sitters is owned and operated by Erin and Jerrod Entzminger, 16-year-old students at Oakwood High School in Silver Spring, Md. Erin is an honor student and has worked on and been in charge of the school newspaper as a writer/reporter, and editor-in-chief. Erin has worked as a cashier at Edmonds Fruit Stand on 3rd and D Streets, SW, Washington, D.C. during the past three summers, as a student intern at Bethune-Cookman Museum on Vermont Ave., NW, Washington D.C., and as a math/language arts tutor for Moorman and Davis, Ltd., an educational tutoring/testing business owned by her mother. Erin assists students’ ages 9 to 11 with reading, grammar and writing skills, and basic mathematics, to include addition, subtraction, multiplication, division, fractions, decimals, percentages, basic algebra and geometry.

Jerrod, her twin brother, like Erin, is an honor student and assists with tutoring students in mathematics and science in the after-school program at Lafayette Elementary school. He has volunteered in this capacity for the past four years, in addition to coaching a "peewee" football team. Erin's and Jerrod's math coupled with her language skills make them excellent candidates for owning and managing a business because a command of mathematics is essential to effectively managing the finances of a business. Moreover, Erin's experience as editor-in-chief of the Oak Wood High newspaper will aid her in writing and negotiating agreements with parents interested in using the service, as well as in managing, marketing, and promoting the business.

FINANCE

How well you manage the business's finances determines your level of success as a business owner. So, it is important that you learn sound financial management skills early on. Your ability to effectively manage money assures that you either have access to funds needed to meet monthly expenses, or it means that you can at least get access to these funds through loans. Following are some of the finance documents that you will need to operate your business efficiently and effectively.

Startup Budget
The startup budget is a breakout of costs that show or indicate how much money you will need to start your business. It identifies the equipment, supplies, and other business related costs, such as insurance, training, supplies, overhead costs, i.e., utilities, rent, etc., that you will need to start your firm.

Below are examples of costs for Erin's and Jerrod's child-sitting business.

BALANCE SHEET
The Balance Sheet lists your assets (valuables that you own), your liabilities (expenses that you must pay) and the equity you as the owner have once the liabilities are subtracted from the assets.

BALANCE SHEET
ERIN 'S SITTERS

INCOME STATEMENT
Erin's Sitters

The expenses listed above reflect the money that Erin must pay to run her business. The continual expenses -- those that must be paid each month, are the Internet Access fee and wages. All other expenses are either bi-annually (paid twice yearly) printer paper; quarterly (paid four times yearly) advertising/promotions; and a one time payment for the design of her webpage.

These expenses also represent financial assumptions, which are variables upon which income projections are made. Example of financial assumptions and their explanations follows:

1. Internet access $5.00/month or $60.00 yearly Assumption - Erin has agreed to help offset the monthly ISP fee of $16.95 for Internet access by paying $5.00 monthly
2. Printer Paper $5.00 bi-annually or $10.00 yearly
3. Assumption - Erin and Jerrod plan to conduct a targeted advertising campaign every six months, so they have agreed to pay $5.00 toward the cost of printer paper, which generally costs $29.00/box, each time they plan to launch an advertising campaign
4. Ads/promotions $4.00/month or $48.00 annually
5. Assumption - Erin and Jerrod have agreed every three months or quarterly to circulate fliers to promote their child-sitting business. This is in addition to the bi-annual ad campaign
6. Web page design $100.00, a one-time payment
7. Assumption - Vendor price quote for adding additional button with pull-down menu
8. PC maintenance $20.00 annually Assumption - Erin and Jerrod have agreed to pay $20.00 annually to help offset the cost of repair work on the PC
9. Color cartridges $15.00 annually
10. Assumption - Both Erin and Jerrod have agreed to pay $15.00 annually to offset the cost of purchasing color cartridges for the printer since they generate color fliers to advertise and promote the business

OPERATING BUDGET

Now that you have completed the startup budget, the balance sheet and the income statement it is time to start developing an operating budget. The operating budget reflects or shows the amount of money that you make and pay out monthly. As a good practice, business owners should have from six to 12 months of operating money available to cover expenses in case of a cash shortfall during the startup phase. In this example, the operating budget is based on the income that Erin and Jerrod anticipates and does not include any savings the teens may have.

ANNUAL OPERATING BUDGET FOR ERIN'S SITTERS