Costs & Margins

Cost Breakdown

Key Assumptions

• 216 children enrolled (80% utilization)
• 20 full-time leads @ $24/hr + healthcare + PTO
• 36.4 FTE part-time assistants @ $18/hr
• 25% staffing buffer for breaks, compliance
• Food: $3.00/child/day (fresh, kitchen-prepared meals)
• 5% turnover allocation for recruiting and training

Why These Costs

• Premium wages reduce turnover: $24/hr for leads, $18/hr for assistants—well above market. Better pay reduces the biggest hidden cost in childcare: constant turnover and training.
• Real food included: All-inclusive meals from central kitchen (vs. processed snacks at typical daycares). Higher cost per child but drives quality perception and parent satisfaction.
• Staffing is 90% of costs: Childcare is fundamentally a labor business. Our efficiency comes from shared infrastructure (kitchen, janitorial, management), not from cutting corners on care.

Cost Breakdown

Key Assumptions

• 754 classes/month across 9 categories
• 10 students/class average @ $40/lesson
• 9 full-time category leads (one per category)
• Part-time assistants for classes requiring support
• Materials budget: $17.75/class average (exploration-style curriculum)

Why These Costs

• High margin by design: 67% margin reflects efficient use of shared infrastructure. Enrichment uses daycare/flex rooms during off-hours.
• Category leads are specialists: Each of 9 categories has a dedicated full-time lead who teaches, plans curriculum, and supervises helpers. Quality instruction drives premium pricing.
• Materials vary by category: Art, Maker, and Life Skills consume more materials; Dance, Gymnastics, and Martial Arts need mostly reusable equipment.

Cost Breakdown

Key Assumptions

• Revenue mix: 56% Staple Meals, 30% Make-to-Order, 14% Café
• Food costs vary by category: Staple 38.7%, Café 22.5%, Make-to-Order 23%
• 1 Head Chef @ $28.50/hr + 3 Sous Chefs @ $24/hr (always 1 on duty)
• ~3.4 FTE part-time kitchen staff

Why These Costs

• Strategic pricing, not maximum margin: 19% margin is intentional. Lower food prices drive facility usage and keep families on-site longer.
• Real food requires real labor: Head Chef + Sous Chefs ensure consistent quality and always-present leadership. Not a fast-food model.
• Staple meals are the value play: Higher food cost % (38.7%) but drives habit formation and repeat visits.

Cost Breakdown

Key Assumptions

• 48 children peak usage (18.8% of total capacity)
• Leverages otherwise empty daycare capacity
• Uses existing staffing infrastructure with marginal additions
• Weekday evenings + weekend operations

Why These Costs

• High margin from capacity utilization: 64% margin reflects use of existing rooms and staff infrastructure. Marginal cost model.
• No full meals: Snacks only (parents typically aren't leaving kids for full day). Lower food costs.
• Only possible at our scale: Pay-per-hour daycare is rare because most daycares can't afford the flexibility. Our traditional enrollment base provides the foundation.

Cost Breakdown

Key Assumptions

• 4 flex rooms (840 sq ft each) with operable partitions
• Year 1 Base: ~21% utilization
• Mix of adult classes, parties, events, member-hosted classes, community rentals

Why These Costs

• Minimal marginal costs: Rooms already built. Primary cost is coordination and occasional setup.
• Cleaning centralized: Janitorial costs tracked in Facility Operating Expenses, not allocated here.
• Significant growth potential: 21% → 50% utilization represents major upside opportunity.

Cost Breakdown

Key Assumptions

• 36 children enrolled
• Before school (6-9am) and after school (3-6pm) care
• 9-month school year only
• Uses Flex 5-6 rooms

Why These Costs

• Strategic service, modest margin: 20% margin is acceptable because school-age care drives transportation enrollment and family engagement.
• Complements transportation: Children arriving via school bus need after-school care. This service captures that demand.
• Lower ratio = lower cost: 1:18 ratio (vs. 1:4 to 1:12 for younger children) dramatically reduces staffing costs.

Cost Breakdown

Key Assumptions

• 54 children enrolled (75% utilization of 72 capacity)
• $300/week per child
• 14 weeks total: Summer (11), Winter (2), Spring (1)
• Uses Flex 5-6 and Flex 11-12 rooms (combined)

Why These Costs

• Leverages existing infrastructure: Uses enrichment rooms and staff during school breaks. No additional capital needed.
• Real food from kitchen: $7/day per child for breakfast, lunch, and snacks—not typical camp food.
• Staff continuity: Uses school-age supervision staff and enrichment leads. Provides additional hours for existing employees.

Cost Breakdown

Key Assumptions

• 2 small buses (30 passengers each)
• 30 students/run average (50% utilization)
• $7/trip pricing
• 720 runs/year (2 runs/day × 5 days × 36 weeks)

Why These Costs

• Strategic near-cost pricing: $7/trip solves the logistics nightmare for families. We're not trying to maximize transportation margin.
• Cross-trained drivers: Drivers work transportation routes + enrichment/daycare/hospitality during the day. Only transportation portion allocated here.
• Competitive moat: Only possible at our scale. Creates lock-in and drives enrichment enrollment.

Cost Breakdown

Key Assumptions

• 2,150 sq ft co-working zone with 40 fixed seats
• 70% occupancy in Year 1 Base
• Revenue from reservation fees only (basic access included in membership)

Why These Costs

• Near-pure margin: 74% margin because co-working uses existing facility infrastructure.
• Utilities and cleaning centralized: Not allocated to co-working; tracked in Facility Operating Expenses.
• Strategic service: Primary purpose is keeping parents on-site while children are in programs. Revenue is secondary.