Day Care Center (Rs. 1.12 Million)

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Pre-Feasibility Study
(Day Care Center)


Small and Medium Enterprises Development Authority
Ministry of Industries & Production
Government of Pakistan
www.smeda.org.pk
HEAD OFFICE
4th Floor, Building No. 3, Aiwan-e-Iqbal Complex, Egerton Road,
Lahore
Tel: (92 42) 111 111 456, Fax: (92 42) 36304926-7
[email protected]

REGIONAL OFFICE
Punjab
REGIONAL OFFICE
Sindh
REGIONAL OFFICE
Khyber Pakhtunkhwa
REGIONAL OFFICE
Balochistan
3
rd
Floor, Building No. 3,
Aiwan-e-Iqbal Complex,
Egerton Road Lahore,
Tel: (042) 111-111-456
Fax: (042) 36304926-7
[email protected]
5
th
Floor, Bahria
Complex II, M.T. Khan Road,
Karachi.
Tel: (021) 111-111-456
Fax: (021) 35610572
[email protected]
Ground Floor
State Life Building
The Mall, Peshawar.
Tel: (091) 111-111-456
Fax: (091) 5286908
[email protected]
Bungalow No. 15-A
Chaman Housing Scheme
Airport Road, Quetta.
Tel: (081) 2831623, 2831702
Fax: (081) 2831922
[email protected]


Note: All SMEDA Services / information related to PM's Youth Business Loan are Free of Cost
May, 2014


Pre-feasibility Study Day Care Center (Rs.1.12 Million)
TABLE OF CONTENTS
1. DISCLAIMER ......................................................................................................................... 2
2. PURPOSE OF THE DOCUMENT ......................................................................................... 3
3. INTRODUCTION TO SMEDA .............................................................................................. 3
4. INTRODUCTION TO SCHEME ............................................................................................ 3
5. EXECUTIVE SUMMARY ..................................................................................................... 4
6. BRIEF DESCRIPTION OF PROJ ECT & PRODUCT ........................................................... 4
7. CRITICAL FACTORS ............................................................................................................ 5
8. INSTALLED & OPERATIONAL CAPACITIES .................................................................. 5
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT ........................................................ 6
10. POTENTIAL TARGET MARKETS & CITIES ..................................................................... 6
11. PROJ ECT COST SUMMARY ................................................................................................ 6
11.1 PROJ ECT ECONOMICS ............................................................................................ 6
11.2 PROJ ECT FINANCING .............................................................................................. 7
11.3 PROJ ECT COST ........................................................................................................ 7
11.4 SPACE REQUIREMENT ............................................................................................ 7
11.5 EQUIPMENT REQUIREMENT ................................................................................... 8
11.6 FURNITURE & FIXTURES REQUIREMENT .............................................................. 8
11.7 HUMAN RESOURCE REQUIREMENT ...................................................................... 9
11.8 REVENUE GENERATION .........................................................................................10
11.9 OTHER COSTS .........................................................................................................10
12. CONTACT DETAILS OF DAY CARE CENTRE EQUIPMENT SUPPLIERS ................. 10
13. ANNEXURE.......................................................................................................................... 12
13.1 INCOME STATEMENT ..............................................................................................12
13.2 BALANCE SHEET .....................................................................................................13
13.3 CASH FLOW STATEMENT .......................................................................................14
13.4 USEFUL PROJ ECT MANAGEMENT TIPS ................................................................15
13.5 USEFUL LINKS .........................................................................................................15
14. KEY ASSUMPTIONS........................................................................................................... 17

Pre-feasibility Study Day Care Center (Rs.1.12 Million)

1. DISCLAIMER
This information memorandum is to introduce the subject matter and provide a general
idea and information on the said subject. Although, the material included in this
document is based on data / information gathered from various reliable sources;
however, it is based upon certain assumptions which may differ from case to case. The
information has been provided on ‘as is where is’ basis without any warranties or
assertions as to the correctness or soundness thereof. Although, due care and diligence
has been taken to compile this document, the contained information may vary due to
any change in any of the concerned factors, and the actual results may differ
substantially from the presented information. SMEDA, its employees or agents do not
assume any liability for any financial or other loss resulting from this memorandum in
consequence of undertaking this activity. The contained information does not preclude
any further professional advice. The prospective user of this memorandum is
encouraged to carry out additional diligence and gather any information which is
necessary for making an informed decision, including taking professional advice from a
qualified consultant / technical expert before taking any decision to act upon the
information.
For more information on services offered by SMEDA, please contact our website:
www.smeda.org.pk


















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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

2. PURPOSE OF THE DOCUMENT
The objective of the pre-feasibility study is primarily to facilitate potential entrepreneurs
in project identification for investment. The project pre-feasibility may form the basis of
an important investment decision and in order to serve this objective, the document /
study covers various aspects of project concept development, start-up, production,
marketing, finance and business management.
The purpose of this document is to facilitate potential investors in Day Care Center by
providing them a general understanding of the business with the intention of supporting
potential investors in crucial investment decisions.
The need to come up with pre-feasibility reports for undocumented or minimally
documented sectors attains greater imminence as the research that precedes such
reports reveal certain thumb rules; best practices developed by existing enterprises by
trial and error, and certain industrial norms that become a guiding source regarding
various aspects of business set-up and it’s successful management.
Apart from carefully studying the whole document, one must consider critical aspects
provided later on, which form basis of any investment decision.
3. INTRODUCTION TO SMEDA
The Small and Medium Enterprises Development Authority (SMEDA) was established in
October 1998 with an objective to provide fresh impetus to the economy through
development of Small and Medium Enterprises (SMEs).
With a mission "to assist in employment generation and value addition to the national
income, through development of the SME sector, by helping increase the number, scale
and competitiveness of SMEs", SMEDA has carried out ‘sectoral research’ to identify
policy, access to finance, business development services, strategic initiatives,
institutional collaboration and networking initiatives.
Preparation and dissemination of prefeasibility studies in key areas of investment has
been a hallmark of SME facilitation by SMEDA.
Concurrent to the prefeasibility studies, a broad spectrum of business development
services is also offered to the SMEs by SMEDA. These services include identification of
experts and consultants and delivery of need based capacity building programs of
different types in addition to business guidance through help desk services.
4. INTRODUCTION TO SCHEME
Prime Minister’s Youth Business Loan, for young entrepreneurs, with an allocated
budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide subsidised
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

financing at 8% mark-up per annum for one hundred thousand (100,000) beneficiaries,
through designated financial institutions, initially by The National Bank of Pakistan
(NBP) and The First Women Bank Limited. (FWBL).
Small business loans from Rs. 0.1 million to Rs. 2.0 million with tenure up to 8 years,
inclusive of grace period of 1 year, and a debt : equity of 90 : 10 will be disbursed to
SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah,
Balochistan, Gilgit Baltistan, Azad J ammu & Kashmir and Federally Administered Tribal
Areas (FATA).
5. EXECUTIVE SUMMARY
Life, today, is characterized by independent family system, need for improved living
standards, quality education for children, etc., resulting in increased pressure on
working women to efficiently manage both their professional and domestic
responsibilities. The demand for day care centers is on the rise, specifically by working
mothers (doctors, business women, government servants, corporate employees,
teachers, etc), and the service is deemed as a profitable entrepreneurship opportunity.
Day Care Center is proposed to be located in major cities such as Islamabad, Lahore,
Karachi, Peshawar, Multan, Gujranwala, Sialkot and Quetta etc.
The project features a facility and its ancillary services for children aged 6 months to 5
years in a hygienic and activity based educational environment, facilitated through
trained and educated staff.
The project can be used for a maximum of 30 enrolments, however, keeping in view the
rationale and demand; calculations have been made on the assumption of 23
enrolments for the first year of operations.
Total cost estimate of the project is Rs. 1.12 million with fixed investment of Rs. 0.77
million and working capital of Rs. 0.35 million. Given the cost assumptions, IRR,
payback period and NPV are 47%, 2.39 years and Rs. 2.37 million respectively.
The project will generate direct employment opportunity for 7 persons. Higher return on
investment and a steady growth of business is expected with the entrepreneur
(especially women) having some prior experience in the related field of business.
6. BRIEF DESCRIPTION OF PROJECT & PRODUCT
The fast paced life of the cities is significantly influencing the life style of its inhabitants.
Economic pressures are compelling both parents to work towards achieving and
sustaining quality life standards. This has further added to complexity and competition
of any metropolitan city. As a result of these social changes, the trend of sending
children to Day Care Centres at a much earlier age is gaining rapid acceptance.
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

This pre-feasibility study provides basic information for setting-up a day care centre with
modern learning techniques and extracurricular activities. The proposed centre will offer
a hygienic and efficiently managed care facility for children aged 6 months to 5 years.
The centre would have the maximum capacity of providing service to 30 children;
however, it assumed that 23 enrolments would be made during first year of its
operation.
The proposed centre is recommended to be established in a rented building/house
having around 3,000 sq.ft., covered area with a reasonable front / back yard.
The total project cost for setting up this centre is estimated at Rs. 1.12 million, out of
which, the capital cost is estimated at Rs. 0.77 million and working capital of Rs. 0.35
million. The project is financed through 90% debt and 10% equity. The project NPV is
around Rs. 2.37 million with an IRR of 47% and payback period of 2.39 years.
7. CRITICAL FACTORS
The proposed project has following factors critical to success;
• Secured, hazard free, and kids friendly environment is provided at center.
• Interior of Center should be designed to attract kids attention and promote
learning. Like colorful walls with educational material, pasting theme oriented
chart papers, and any other cost effective mode deem appropriate.
• Developing plan of daily activities of enrolled kids.
• Extra care should be given to keep the place hygienic, and clean.
• Location of the center in a commercial area.
• Opening of center with proper launch and promotional material.
• Hiring of a well-trained / experienced care provider for kids.
• Establishment of the Center in a rented building to reduce the project cost.
• Parents are informed immediately in case of strike, kid is unwell (fever, flue,
diarrhea, etc.), diaper rash and any other observation important for child
development.
• Frequent interaction between care provider and parent.
8. INSTALLED & OPERATIONAL CAPACITIES
It is proposed that infants of age more than 6 months and children of ages up to 5 years
may be enrolled in the center. The centre will have a maximum capacity of 30
enrolments. Initially, the overall utilization in the first year of operation would be 75%
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

(i.e. 23 kids would be enrolled). This initial capacity is assumed to grow at a constant
rate of 5% in subsequent years.
9. GEOGRAPHICAL POTENTIAL FOR INVESTMENT
The increasing population and high concentration of educated / working class in major
cities like Karachi, Lahore, Islamabad, Peshawar, Quetta, Multan, Gujranwala, etc.,
offers a very lucrative business opportunity for opening up well planned Day Care
Centres. However, it is recommended that the centre should be located in an easily
approachable location, in line with the selected target market.
10. POTENTIAL TARGET MARKETS & CITIES
The target market for the proposed centre is working couple having infants of age more
than 6 months to children of ages up to 5 years. The business community also has a
positive response towards the idea of day care center due to their busy schedules and,
therefore, can be targeted as potential customers.
Keeping in view the economic and social factors, it is recommended that the proposed
project may be established in major cities such as Islamabad, Lahore, Quetta, Karachi,
Multan, and Peshawar. However the project may also be opened in other cities and
towns after careful market analysis.
11. PROJECT COST SUMMARY
A detailed financial model has been developed to analyze the commercial viability of
Day Care Center under the ‘Prime Minister’s Youth Business Loan’. Various cost and
revenue related assumptions along with results of the analysis are outlined in this
section. The projected Income Statement, Cash Flow Statement and Balance Sheet are
attached as appendices.
11.1 Project Economics
The proposed venture has the capacity of 30 enrolments, however, a target of 23
enrolments is assumed in year 01 of the proposed center. The following table shows
internal rate of return and payback period.
Table 1: Project Economics
Description Details
Internal Rate of Return (IRR) 47%
Payback Period (yrs) 2.39
Net Present Value (NPV) Rs. 2,371,782
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

Returns on the scheme and its profitability are highly dependent on the efficiency of
operations, location, staff, hygienic environment, safety, curricular and extracurricular
activities, etc.
11.2 Project Financing
Following table provides details of the equity required and variables related to bank
loan;
Table 2: Project Financing
Description Details
Total Equity (10%) Rs.112,385
Bank Loan (90%) Rs.1,011,466
Markup to the Borrower 8%
Tenure of the Loan (Years) 8
Grace period (year) 1

11.3 Project Cost
Following requirements have been identified for operations of the proposed business.
Table 3: Capital Investment for the Project
Capital Investment Amount (Rs.)
Office Equipment 27,500
Furniture & Fixtures 452,000
Machinery & Equipment 252,500
Pre Operating Cost 42,855
Total Capital Costs 774,855
Upfront Building Rent 240,000
Cash 108,996
Initial Working Capital 348,996
Total Project Cost 1,123,851


11.4 Space Requirement
It is recommended that the proposed project should be established in a rented building,
preferably lower portion of a house having an area of 3,000 sq.ft. with two bedrooms
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

and attached bath, one drawing / dining room, one kitchen and a reasonable front /
back yard. The rent for the building is estimated at Rs. 40,000 per month.

11.5 Equipment Requirement
The basic requirements for a day care center include activity based equipment for
outdoor/play area activities (slides, merry-go-round and swings etc.), equipment for
indoor activities (soft boards, books, paints, char papers, colours, blocks, educational
toys, etc.), kitchen equipment (microwave, refrigerator, utensils, etc.), entertainment
equipment (LCD., DVD player) and sleeping cots / beds, all of which are readily
available in the local market. Details of the equipment are given as below;

Table 4: Equipment Required for Center and Office
Equipment Details Qty Cost/Unit Total Cost
Slide (iron) 1 15,000 15,000
Merry-go-round 1 20,000 20,000
Swings (Outdoor) (3 seater) 1 30,000 30,000
Baby eating seat 2 8,000 16,000
Baby rocker / swing chair 2 4,000 8,000
Sleeping cot 3 10,000 30,000
Mattress 4 8,000 32,000
Soft boards 1 1,500 1,500
Burner stove 1 3,000 3,000
Microwave 1 12,000 12,000
Refrigerator 1 25,000 25,000
Kitchen utensils 10,000 10,000
Miscellaneous (books, colors, paints, toys,

50,000 50,000
Total 252,500




11.6 Furniture & Fixtures Requirement
Furniture & fixtures requirement for the project is detailed as under:

Table 5: Furniture & Fixture Detail
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

Description Qty Cost/Unit Total Cost
(Rs.)
Office chairs 2 2,500 5,000
Office table 1 8,000 8,000
Sofa cum bed 2 15,000 30,000
Seating chairs (children) 27 2,000 54,000
Study table (indoor) 2 10,000 20,000
Book rack (Library) 2 5,000 10,000
Eating table (8 chairs) 2 15,000 30,000
Carpeting & Furnishings 3,000 30 90,000
Electric wiring & lighting 1 10,000 10,000
LCD 1 40,000 40,000
DVD Player 1 10,000 10,000
Air conditioners (1.5 ton window) 2 50,000 100,000
UPS (3KVA) with batteries 1 45,000 45,000
Total Furniture & Fixtures 452,000

11.7 Human Resource Requirement
The manpower required for operating the Day Care Center is as follows:

Table 6: Human Resource Detail
Description Quantity Monthl y Salary /
employee (Rs.)
Total Monthl y Salary
(Rs.)
Owner / Manager 1 15,000 15,000
Nannies
1
4 11,000 44,000
Helper / J unior staff 1 10,000 10,000
Guard 1 10,000 10,000
Total 7 79,000

It is highly recommended that nannies should be qualified females so that parents can
be assured of about their child’s proper care and safety. The nannies should be at least
intermediate pass with good communication skills and empathy for children, and
preferably trained for childcare. Moreover, the owner/manager should develop a daily
plan for kids’ activities including:

1
It is assumed that 1 nanny is required for 5-6 children.
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

• One hour circle time daily full of action, music and fun for kids (covering nursery
rhymes, alphabets/colors/number recognition songs and physical moves acted
together kids and caregivers)
• Colouring, pasting, and painting activities
• Share with kids concept of different festivals of Pakistan (Pakistan day, Eid, Iqbal
Day, Quaid-e-Azam Day, etc)
• Also give them other basic ideas regarding family, places, senses, body parts,
manners, greetings, sharing, seasons, days, transport, animals, etc.
• Play time (indoor & outdoor)
• Nap time
• Dinning (Breakfast, lunch, tea time, and for infants feed every 2 hours)
• Diaper change every 3-4 hours or as desired.

Each child Parent be asked to send a daily diary to record daily report of their child. This
will include recording child meal times and quantity eaten, milk/ water intake time and
ounces consumed, theme of the week, diaper changes, any unusual occurrence (fever,
vomit, fight, etc).
11.8 Revenue Generation
It is proposed that infants of more than 6 months of ages to children of 5 years of ages
be enrolled in the center. The project would have a total capacity of 30 enrollments.
However, keeping in view market research and analysis, it is assumed that project
capacity would be 23 enrolments in year 01 of its operation.

Table 7: Revenue Detail
Fees / month (Rs./Unit) First Year
Enrolment
Monthl y Revenue
(Rs)
8,000 23 184,000
Annual Revenue 2,208,000
11.9 Other Costs
The primary overhead cost of the project would be utilities comprising electricity, gas &
water, whereas cost of fuel must be kept in mind for generator expenses.

12. CONTACT DETAILS OF DAY CARE CENTRE EQUIPMENT
SUPPLIERS
Below is the list of major suppliers of Children Toys for Day Care Center:
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)

Babyland Toys
1st Floor, Sheikh Innayat-Ullah Building,
Liberty Market, Gulberg 3,
Lahore, Pakistan
Tel: 042-35757468, Mob: 0336-4050607
www.babyland.com
Kaymu Toys
Arfa Software Technology Park
Ferozpur Road, Lahore, Pakistan
Tel: 042 - 35972162
www.kaymu.pk


Other local wholesale market in different cities maybe contacted for the said purpose.
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)
13. ANNEXURE
13.1 Income Statement



Income Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Revenue 2,208,000 2,534,400 3,020,160 3,449,952 3,794,947 4,174,442 4,591,886 5,051,075 5,556,182 6,111,800
Cost of sales
Operationcosts1(direct labor) 828,000 910,800 1,001,880 1,277,760 1,405,536 1,546,090 1,700,699 1,870,768 2,057,845 2,263,630
Total cost of sales 828,000 910,800 1,001,880 1,277,760 1,405,536 1,546,090 1,700,699 1,870,768 2,057,845 2,263,630
GrossProfit 1,380,000 1,623,600 2,018,280 2,172,192 2,389,411 2,628,352 2,891,188 3,180,306 3,498,337 3,848,171
General administration &selling expenses
Administrationexpense 120,000 132,000 145,200 159,720 175,692 193,261 212,587 233,846 257,231 282,954
Buildingrental expense 480,000 528,000 580,800 638,880 702,768 773,045 850,349 935,384 1,028,923 1,131,815
Electricityexpense 240,000 264,000 290,400 319,440 351,384 386,522 425,175 467,692 514,461 565,907
Water expense 24,000 26,400 29,040 31,944 35,138 38,652 42,517 46,769 51,446 56,591
Gasexpense 12,000 13,200 14,520 15,972 17,569 19,326 21,259 23,385 25,723 28,295
Promotional expense 110,400 126,720 151,008 172,498 189,747 208,722 229,594 252,554 277,809 305,590
Depreciationexpense 75,950 75,950 75,950 75,950 75,950 192,768 192,768 192,768 192,768 192,768
Amortizationof pre-operatingcosts 8,571 8,571 8,571 8,571 8,571 - - - - -
Miscellaneousexpense1 18,000 19,800 21,780 23,958 26,354 28,989 31,888 35,077 38,585 42,443
Subtotal 1,088,921 1,194,641 1,317,269 1,446,933 1,583,174 1,841,286 2,006,138 2,187,475 2,386,946 2,606,363
OperatingIncome 291,079 428,959 701,011 725,259 806,237 787,066 885,049 992,831 1,111,391 1,241,807
EarningsBeforeInterest & Taxes 291,079 428,959 701,011 725,259 918,237 787,066 885,049 992,831 1,111,391 1,241,807
Interest expenseonlongtermdebt (Project Loan) 57,881 52,991 46,563 39,602 32,063 23,899 15,057 5,481 - -
Interest expenseonlongtermdebt (WorkingCapital Loan) 26,070 23,867 20,972 17,837 14,441 10,764 6,782 2,468 - -
Subtotal 83,951 76,858 67,536 57,439 46,505 34,663 21,838 7,949 - -
EarningsBeforeTax 207,128 352,101 633,475 667,820 871,733 752,403 863,211 984,882 1,111,391 1,241,807
Tax - - 23,348 26,782 53,260 35,360 51,982 70,232 89,209 108,771
NET PROFIT/(LOSS) AFTER TAX 207,128 352,101 610,128 641,038 818,473 717,043 811,230 914,650 1,022,183 1,133,036
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)
13.2 Balance Sheet

Balance Sheet
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Current assets
Cash& Bank 108,996 376,645 674,546 1,218,511 1,780,386 1,326,674 2,043,317 2,837,456 3,716,875 4,880,380 6,772,092
Pre-paidbuildingrent 240,000 264,000 290,400 319,440 351,384 386,522 425,175 467,692 514,461 565,907 -
Total Current Assets 348,996 640,645 964,946 1,537,951 2,131,770 1,713,196 2,468,491 3,305,148 4,231,336 5,446,287 6,772,092
Fixed assets
Machinery& equipment 252,500 227,250 202,000 176,750 151,500 532,904 466,988 401,073 335,158 269,242 203,327
Furniture& fixtures 452,000 406,800 361,600 316,400 271,200 953,951 835,955 717,960 599,965 481,970 363,975
Officeequipment 27,500 22,000 16,500 11,000 5,500 44,289 35,431 26,573 17,716 8,858 -
Total FixedAssets 732,000 656,050 580,100 504,150 428,200 1,531,143 1,338,375 1,145,607 952,839 760,070 567,302
Intangible assets
Pre-operationcosts 42,855 34,284 25,713 17,142 8,571 - - - - - -
Total IntangibleAssets 42,855 34,284 25,713 17,142 8,571 - - - - - -
TOTAL ASSETS 1,123,851 1,330,979 1,570,759 2,059,243 2,568,541 3,244,340 3,806,866 4,450,755 5,184,175 6,206,358 7,339,394
Longtermdebt (Project Loan) 697,370 697,370 619,929 536,060 445,230 346,861 240,327 124,952 - - -
Longtermdebt (WorkingCapital Loan) 314,096 314,096 279,217 241,442 200,532 156,227 108,244 56,278 - - -
Total LongTermLiabilities 1,011,466 1,011,466 899,145 777,502 645,762 503,087 348,571 181,230 - - -
Shareholders' equity
Paid-upcapital 112,385 112,385 112,385 112,385 112,385 112,385 112,385 112,385 112,385 112,385 112,385
Retainedearnings 207,128 559,229 1,169,356 1,810,394 2,628,867 3,345,910 4,157,140 5,071,790 6,093,973 7,227,009
Total Equity 112,385 319,513 671,614 1,281,741 1,922,780 2,741,252 3,458,295 4,269,525 5,184,175 6,206,358 7,339,394
TOTAL CAPITAL AND LIABILITIES 1,123,851 1,330,979 1,570,759 2,059,243 2,568,541 3,244,340 3,806,866 4,450,755 5,184,175 6,206,358 7,339,394
Liabilities & Shareholders' Equity
Assets
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Pre-feasibility Study Day Care Center (Rs.1.12 Million)
13.3 Cash Flow Statement



Cash Flow Statement
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Operating activities
Net profit 207,128 352,101 610,128 641,038 818,473 717,043 811,230 914,650 1,022,183 1,133,036
Add: depreciationexpense 75,950 75,950 75,950 75,950 75,950 192,768 192,768 192,768 192,768 192,768
amortizationof pre-operatingcosts 8,571 8,571 8,571 8,571 8,571 - - - - -
Deferredincometax - - - - - - - - - -
Pre-paidbuildingrent (240,000) (24,000) (26,400) (29,040) (31,944) (35,138) (38,652) (42,517) (46,769) (51,446) 565,907
Cashprovidedbyoperations (240,000) 267,649 410,222 665,609 693,615 867,855 871,159 961,481 1,060,649 1,163,505 1,891,712
Financing activities
Project Loan- principal repayment - (77,441) (83,869) (90,830) (98,369) (106,533) (115,376) (124,952) - -
WorkingCapital Loan- principal repayment - (34,880) (37,775) (40,910) (44,305) (47,983) (51,965) (56,278) - -
Additionsto Project Loan 697,370 - - - - - - - - - -
Additionsto WorkingCapital Loan 314,096 - - - - - - - - - -
Issuanceof shares 112,385 - - - - - - - - - -
Cashprovidedby/ (usedfor) financingactivities 1,123,851 - (112,321) (121,644) (131,740) (142,674) (154,516) (167,341) (181,230) - -
Investing activities
Capital expenditure (774,855) - - - - (1,178,893) - - - - -
Acquisitions
Cash(usedfor) / providedbyinvestingactivities (774,855) - - - - (1,178,893) - - - - -
NET CASH 108,996 267,649 297,901 543,965 561,875 (453,712) 716,643 794,140 879,419 1,163,505 1,891,712
SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST 14
Pre-feasibility Study Day Care Center (Rs.1.12 Million)

13.4 Useful Project Management Tips

Human Resources

• Adequacy & Competencies: Skilled and experienced staff should be considered an
investment even to the extent of offering share in business profit.
• Performance Based Remuneration: Attempt to manage human resource cost should
be focused through performance measurement and performance based compensation.

Marketing
• Ads & P.O.S. Promotion: Business promotion and dissemination through banners, and
launch events is highly recommended. Product brochures from good quality service
providers. Also, have facebook page which is updated regularly.

13.5 Useful Links
• Prime Minister’s Office, www.pmo.gov.pk
• Small and Medium Enterprise Development Authority, www.smeda.org.pk
• The National Bank of Pakistan (NBP), www.nbp.com.pk
• The First Women Bank Limited (FWBL), www.fwbl.com.pk
• Government of Pakistan, www.pakistan.gov.pk
• Ministry of Industries & Production, www.moip.gov.pk
• Ministry of Education, Training & Standards in Higher Education, http://www.moptt
• Government of Punjab, www.punjab.gov.pk
• Government of Sindh, www.sindh.gov.pk
• Government of Khyber Pakhtunkhwa, www.khyberpakhtunkhwa.gov.pk
• Government of Balochistan, www.balochistan.gov.pk
• Government of Gilgit Baltistan, www.gilgitbaltistan.gov.pk
• Government of Azad J ammu & Kashmir, www.ajk.gov.pk
• Trade Development Authority of Pakistan (TDAP), www.tdap.gov.pk
• Securities & Exchange Commission of Pakistan (SECP), www.secp.gov.pk
SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST 15
Pre-feasibility Study Day Care Center (Rs.1.12 Million)

• Federation of Pakistan Chambers and Commerce and Industries (FPCCI),
www.fpcci.com.pk
• State Bank of Pakistan (SBP), www.sbp.org.pk
• All Pakistan Private Schools Welfare Association (APPSWA), www.appswa.com.pk
• Montessori Education Pakistan, www.montesoori.edu.pk
• Pakistan Montessori Association, www.pakistanmontessoriassociation.org/



SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST 16
Pre-feasibility Study Day Care Center (Rs.1.12 Million)

14. KEY ASSUMPTIONS
Particular Assumptions
Sales Price Growth Rate 10 % per year
Capacity Utilization Growth Rate 5 % per year
Increase in utilities (Electricity/Water/Gas) 10 % per year
Debt / Equity Ratio 90 : 10
Depreciation Rate
Machinery & Furniture 10 % per year
Office Equipment 20 % per year
Loan Period 8 Years inclusive of 1 year grace period
Loan installments Monthly
Enrolment Capacity 30
Enrolment Capacity Year 1 23
Financial Charges (Loan Rate) 8 % per year

SMEDA Services / Information related to PM’s Youth Business Loan are FREE OF COST 17

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