steps for a successful start · perience of building a successful business from the ground up. ina...

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ABOUT INA INA is a private, non-profit educa- tional organization serving nannies and those who educate, place, employ and support professional in-home child care providers. INA serves as the umbrella association for the in-home child care industry by providing information, education and guidance to the public and to industry professionals. Since its inception in 1985, INA has been dedicated to improving the quality of in-home child care that children receive, by providing nannies with educational resources to aid in their professional develop- ment. THE ROLE OF NANNY PLACEMENT AGENCIES Nanny placement agencies play a valuable role in the in-home child care industry. As service compa- nies, placement agencies strive to match the skills and qualifications of nannies with the needs and preferences of families seeking an in-home child care provider. Members of the International Nan- ny Association agree to abide by INA’s Commitment to Professional Excellence and Recommended Practices. STARTING A NANNY PLACEMENT AGENCY Starting a nanny placement agen- cy is an exciting and challenging endeavor, and the International Nanny Association wishes you great success! Many INA mem- bers have been through the ex- perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the country to help you take the necessary steps for a suc- cessful start. The following publi- cation stresses the time, research, money and dedication required to start a viable, quality and success- ful agency. The steps provided in this package will assist you in de- veloping a sound business plan to decide if and when you are ready to launch a new agency. ABOUT THIS PUBLICATION Steps to a Successful Start was developed to serve as a basic business plan and resource for those contemplating starting their own nanny placement agency. Utilizing the strategies, tools and tips within this publication can help assure that you’ll be well on your way to starting a successful nanny placement agency. INA International Nanny Association Steps for a Successful Start A Basic Business Plan for Launching a New Placement Agency

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Page 1: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

ABOUT INA

INA is a private, non-profit educa-tional organization serving nannies and those who educate, place, employ and support professional in-home child care providers. INA serves as the umbrella association for the in-home child care industry by providing information, education and guidance to the public and to industry professionals.

Since its inception in 1985, INA has been dedicated to improving the quality of in-home child care that children receive, by providing nannies with educational resources to aid in their professional develop-ment.

THE ROLE OF NANNY PLACEMENT AGENCIES

Nanny placement agencies play a valuable role in the in-home child care industry. As service compa-nies, placement agencies strive to match the skills and qualifications of nannies with the needs and preferences of families seeking an in-home child care provider.

Members of the International Nan-ny Association agree to abide by INA’s Commitment to Professional Excellence and Recommended Practices.

STARTING A NANNY PLACEMENT AGENCY

Starting a nanny placement agen-cy is an exciting and challenging endeavor, and the International Nanny Association wishes you great success! Many INA mem-bers have been through the ex-perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the country to help you take the necessary steps for a suc-cessful start. The following publi-cation stresses the time, research, money and dedication required to start a viable, quality and success-ful agency. The steps provided in this package will assist you in de-veloping a sound business plan to decide if and when you are ready to launch a new agency.

ABOUT THIS PUBLICATION

Steps to a Successful Start was developed to serve as a basic business plan and resource for those contemplating starting their own nanny placement agency.

Utilizing the strategies, tools and tips within this publication can help assure that you’ll be well on your way to starting a successful nanny placement agency.

INAInternational Nanny Association Steps for a Successful Start

A Basic Business Plan for Launching a New Placement Agency

Page 2: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 1: RESEARCH THE MARKETPLACE AND THE INDUSTRY

Before making the decision to begin your new business you must research your marketplace. For your busi-ness to be successful, there must be an actual need for the services you will provide. Research will help you determine if there is a need for your business and will help you understand the competition, the details of your competitors’ placement process, the costs of starting your business, and more. Thorough research will allow you to confidently decide if you are ready to go into business and will help you determine your chances for success. The following list of questions and considerations can be used to help guide you through the research process:

Assess Demand and Supply• What is the demand for caregivers in your market? Is this demand already being met?• How many nanny agencies are serving your potential market? Is there room for one more?• How much of the market is served by local full-service agencies vs. national online services?• Will you place all levels of domestic employees or only child care providers? • Will you place part-time nannies and newborn care specialists?• Will you want to co-broker (share placements) with agencies located in other areas? • Will you be able to fill your clients’ requests?• Will you be able to find jobs for nannies who apply?

Determine Demand in Your Market for Different Services Within the Industry• Amount of demand for full-time nannies.• Amount of demand for part-time nannies.• Amount of demand for after-school care.• Amount of demand for temporary care.• Amount of demand for housekeeping services.• Amount of demand for infant specialist care• Amount of demand for other home care – eldercare, nursing, etc.

Assess Competition and Pricing• What are other agencies charging for their services in your market?• Is there room for another placement agency in your market? Will you be meeting a demand that is not met,

or will you be simply sharing the market with your competitors?• What services do competitors offer? Will you offer something different and/or something better?

Commitment to providing a professional service means charging professional and competitive fees. If you want applicants and clients to give you a try, you will need to demonstrate that you provide more value and quality than the competition. Providing dedication, thoroughness and value to each and every client that you work with will produce results.

Page 3: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Determine Family Demographics• What is the average household income in your marketplace?• What is the average age of homeowners in your marketplace?• What is the number of infants and young children in the area where you wish to establish your business?

Determine Potential Target Clients According to the 2009 INA Nanny Salary and Benefits Survey, the majority of families that employ a nanny are professional couples including attorneys, stock brokers, doctors, financial consultants, corporate VIPs, etc. That same survey showed that the second largest group of nanny employers were families where one or both parents work from home. At the bottom of the list of nanny employers were celebrities and independently wealthy individuals.

Determine Caregiver Demographics• From what area of town to most caregivers come?• What is the average age of the typical caregiver?• What is the average education of the typical caregiver?• Do most of the caregivers work full time or part time (i.e. students, etc.)?• Do caregivers typically have transportation?• Do caregivers in your area speak English fluently?• Are caregivers in your area legally able to work in the United States?• Do most caregivers have some childcare experience?• Do caregivers typically have CPR and First Aid certifications?

Determine the Pool of Available Caregivers and Potential Clients in the Area Running trial Internet ads to test their response and visiting local parks and playgrounds during the day to ask nannies and parents for their opinions on starting an agency can help you evaluate the potential pool of clients and caregivers in your area. You just may hear “What this area needs is a good nanny agency!”

Determine Sources for Recruiting Caregivers Running ads on Internet job sites or print ads in neighborhood newspapers can be effective in recruiting care-givers. You may also find success in placing flyers on bulletin boards in libraries and coffee shops. When you advertise for nanny candidates it is vital that the format you use be professional and that the language outlines the basic qualifications potential caregivers must have. Doing so will help attract the highest quality candidates to represent your agency.

Page 4: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Determine Salary Ranges and Standard Benefits The 2009 INA Nanny Salary and Benefits Survey is a solid resource for evaluating national salaries and ben-efits for nannies. Nanny salaries range from $15,000 per year to in excess of $80,000 per year. Salary ranges vary by geographical areas and are influenced by the nanny’s education, years of experience, number of chil-dren that they are care for, on the job responsibilities, additional benefits that they receive from their employer and if they are living in employer furnished housing or not. The 2009 INA Nanny Salary and Benefits Survey details the number of nannies that are receiving employer paid health insurance, employer furnished vehicles, paid vacation time, etc.

• Research the steps that need to be taken and the requirements that need to be met to secure a successful placement.

• Research industry standards and best practices that provide a thorough and quality placement. INA pub-lishes industry standards and recommendations, and the most successful agencies in the country adhere to them, as they create success.

• Research the process for legal work status verification.• Research the background screening process.• Research reference, employment and education screening processes.• Research effective interviewing techniques.• Research effective matching of responsibilities and skills.• Research how to advise clients and caregivers.• Research effective salary negotiation techniques and strategies.• Research household employee/employer work agreements and contracts.• Research how to set client and candidate expectations• Research efficient data capture and tracking methods.• Research effective documentation storage systems.• Research legal requirements for data retention.• Research the tools and materials needed to carry out placements.• Research Equal Employment Oppportunity Commission (EEOC) requirements.• Research payroll and tax laws for domestic employers and employees.• Research successful follow-up and relationship building techniques and strategies.

Page 5: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 2: RESEARCH THE START UP COSTS

Before starting any business it is vital to research the costs that are required to start up. This information will allow you to easily determine if you have the financial means to go into business and help you to develop an accurate budget.

• Determine if bonding insurance and state or local licensing is required.• Determine other legal requirements in your state or area, such as applicable taxes that create expenses.• Research what type of legal business entity is right for your agency. • Determine where your agency will be located and the cost of renting office space.• Determine hours of operation.• Determine the cost of telephone and Internet service.• Research advertising/marketing options that will attract nannies and clients.• Create a company logo, letterhead and other office graphics.• Determine printing needs.• Determine website development costs.• Determine what type of insurance (professional, liability, renters, etc.) is needed.• Determine legal, accounting and consulting fees.• Research and estimate capital expenses: computers, phones, office furniture, fax/copy machine, etc.• Determine software requirements: financial/payroll software, placement software, etc.

LicensingIt’s important to check with your state capital’s Bureau of Licensing Department (the name may vary from state to state) prior to starting your business. Your state’s information may be found on their website or you may have to call to request information outlining the types of businesses that require a license in your state. Some states may require that you purchase a bond in order to legally do business. If a bond is required, contact an INA Member insurance agent that specializes in providing insurance for nanny placement agencies. Your local municipality may also require that you be licensed.

Business EntitiesConsidering what business structure is right for you is an important part of the research process. You should consult both your accountant and a tax attorney before you make a decision. The most common consider-ations for a small business include Sole Proprietorship, General Partnership, Limited Partnership, Limited Li-ability Company or S-Corporation. The entities differ in personal liability (risk) and tax liability.

Page 6: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Office LocationWhen choosing your business address, whether it will be a home office or commercial office space, there are issues to consider. While a home office may be convenient, there are many benefits to having a designated professional office space. These include visibility and credibility, in addition to having a professional space to host an office staff. If you will be renting office space you should consider the following: Is it in an area that local residents recognize (a main street)? Can it be easily found? Can applicants get there by public trans-portation? Since your business may service a high end clientele, you should ask yourself if your location says that you are a high end service provider. If you are going to rent office space you will need to investigate the availability of small office space, rental rates and possible extras including utilities, building maintenance or an annual assessment (share) fee to cover of the upkeep of common spaces within the building.

EmployeesWhen starting your business you will need to determine if you can do it on your own or if you will need an employee to help you. Remember that you will be the accountant and the administrative assistant, the inter-viewer, the reference checker, the placement consultant, the marketing and sales person, and you may even be the janitor. If you are not able “to do it all”, you may discover that you need another person to help, either as a partner or as an employee.

Business EquipmentTelephone System: You will spend a significant portion of the day on the phone so it will be vital to ensure that your phone system and service allows for additional phones and phone lines. In addition, you will need to decide how sophisticated the voicemail options need to be for your business model. When choosing a long distance carrier you should take into consideration that you will occasionally be calling out of state when check-ing nanny references and contacting clients who are out of state and moving to or visiting your area. If you will be doing national placements you may want to check into VOIP (Voice over Internet Protocol) service.

Fax/Copy Machine: With the ability to email applications and resumes the need to fax has been reduced, but you will still find that you will need to send and receive certain documents by fax. There are many multi func-tion machines available on the market that will scan, copy, print and fax. Since you may be copying applica-tions, handouts and identification documents you may find that you need a more robust copier than the multi function machine. If you decide that you need a copier you will need to determine whether you should buy or lease. There are also Internet programs available like E-Fax that allow you to send and receive faxes using an email based program.

Computers: Investing in a quality computer is critical, as all aspects of your business will be managed via technology, from marketing to client and applicant contact, and everything in between. Things to consider when searching for a computer system include whether to lease or buy and networking capacity. Software: Research as many software products as possible to bring efficiency to your business. You will want to demo financial tracking and payroll software, contact management software, placement software and more.

Page 7: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Website Development As a startup company, it will be critical to develop a website that has a strong image, web presence and high level professionalism, but you’ll want to do so at an affordable cost. Obtaining multiple bids from web design-ers will be very worthwhile, as website development costs can vary greatly. In addition, your Internet service provider will be an important consideration in your business. So much business is done on the Internet today that you will want the best possible service. Website maintenance and regular enhancement is also a critical expense to budget for on an ongoing basis.

Advertising Getting the word out about your business is vital to its success. The wording and the placement of advertis-ing is critical to maximizing results and advertising dollars. As a new business owner you’ll quickly notice that advertising will be one of the most expensive items on your expense report. A well designed website is also an advertising vehicle as both prospective nannies and clients will be searching the Internet for agencies in their area.

Initially, you will need to recruit enough applicants to fill the positions of the families who contact you. You may place want ads in large metropolitan newspapers, which generally cost more, or you may place ads in the neighborhood papers, which are a bit more reasonably priced as they have a smaller readership. You can also recruit by advertising in local universities newspapers and job posting websites. And for little or no charge you can post flyers wherever potential applicants may see them.

To attract clients you may want to advertise in the child/parent related publications in your area or develop a strong presence on the Internet through reciprocal links and city directories. Posting flyers in places that parents of young children may frequent, such as Mommy and Me groups or nursery schools, may earn you ad-ditional exposure.

Logo Design and PrintingOne of the most important things you will do as a new business owner is develop an “identity” that is unique to your agency. You may wish to consult with a marketing company or a graphic artist to help you design your logo. You will need letterhead, printed return address envelopes and business cards that carry your logo to help brand your professional identity. You may also wish to produce an impressive brochure for your agency. A marketing or public relations company can help you with design and content. While tempting and affordable, a home-made brochure may discount your professional image.

Business InsuranceIf you’ll be leasing or renting office space, most landlords require tenants to carry property insurance for their office space and common areas. In addition, all nanny referral agencies should have professional liability insurance as domestic placement agencies are a high-risk business. If you will have employees, you should check with your state to determine if worker’s compensation insurance is required. If you are self-employed and not otherwise covered, you will also want to inquire about health insurance, dental insurance, disability insurance and life insurance for yourself and your family.

Page 8: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Professional Services Many new businesses employ the products and services of a consultant to decrease the time required to ef-fectively launch a new business. In doing so you’ll benefit from tested best practices and procedures, eliminate risk and enhance professionalism through the purchase of professionally developed agreements and corre-spondence.

Tax Attorney/AccountantThe advice of a tax attorney or accountant on the appropriate business entity for your agency is important in helping you identify and minimize your personal risk and tax liabilities.

Contract AttorneyContracts that may be presented to clients and to nannies requires the input and review of an attorney to minimize your risk of liability. For this reason you may wish that the attorney review your proposed business practices while reviewing any agreements. You should also plan to establish a relationship with an attorney for future consultation.

Background ScreeningConducting thorough background screening is one of the most important aspects of operating a nanny place-ment agency. For this reason it is vital to fully understand the many levels of background screening available for potential nanny candidates. A complete and thorough screening process creates value and eliminates risk for your business. Visit www.nanny.org for Recommended Practices for Background Screenings.

Payroll and Tax Services for Clients and CandidatesBudgeting, salary negotiations and knowledge of tax requirements are critical to a successful domestic place-ment. Before talking to your first client, make sure that you are well versed on basic budgeting and the tax laws that pertain to domestic employment. Doing so will help to reduce your risk and create value for your busi-ness. Passing along important tax and employment laws to potential employers costs you nothing but sets you apart as a professional who has a better understanding of the domestic placement industry.

Nanny BenefitsFamilies and nannies will value recommendations for obtaining health insurance and other employment bene-fits. While providing quality recommendations costs agency owners nothing, it enhances your service offerings and sets you apart as a knowledgeable professional.

Page 9: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 3: LEARN THE BENEFITS OF PARTNERSHIPS WITH INDUSTRY EXPERTS

Value of PartnershipsNo business can be all things to all people, however a successful business owner understands how to lever-age the expertise and offerings of industry businesses that complement its service offering. Leveraging busi-ness partnerships will allow you to create the image of being all things to all people. In order to offer more value, more service, more expertise, more resources and a higher quality of service than your competitors, you must develop partnerships to effectively and professionally expand your service offerings. You can offer unpar-alleled knowledge, expertise and service by leveraging industry partners who provide the best in their area of expertise. The International Nanny Association provides an industry forum for some of the most experienced, dedicated and knowledgeable experts in the in-home child care industry. Learning to leverage partnerships with these industry experts will make a difference in the growth and success of your business.

A list of INA member industry service providers can be found in the member list section of www.nanny.org.

Q& A

How long before you were able to hire someone to assist you?

I waited to hire anyone beyond the point when I needed assistance. I worried that no one could put as much care and concern into the screening process as I did. Once it got to the point that I could not possibly handle the volume of calls, I had to give it a try. It was in my third or fourth year in business when I first brought someone in to work for me on a full time basis. We shared responsibilities. It took a little while to build trust in her abilities and after six monthsI added a part-time employee to help her. I now have 3 employees and they do it all except the administrative tasks.

~Pat Cascio, Owner Morningside Nannies

Page 10: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Payroll and Tax Services for Clients and CandidatesPayroll and tax services offer complete management of the payroll and tax process for household employ-ers and their employees. They provide educational materials that can be built into your placement process to ensure that your clients and candidates know their legal obligations, budget effectively and negotiate salary successfully.

A list of INA member industry service providers that specialize in household tax and payroll services can be found in the member list section of www.nanny.org.

Background Investigation ServicesBackground investigation services offer background screenings for a fee to agency owners. Various types of screenings are available, so it is important that you understand exactly what the fees include.

A list of INA member industry service providers that specialize in background investigation services for the in-home child care industry can be found in the member list section of www.nanny.org.

Legal ServicesConsulting an attorney can be valuable in assisting you with everything from structuring your business entity to developing legally accurate contracts and work agreements.

A list of INA member industry service providers that specialize in household employment related legal services can be found in the member list section of www.nanny.org.

Q& A

What do you think families want most from an agency?

The knowledge and security in knowing that the people referred to them are ”good” people. That is, checked inside and out, as much as humanly possible. They want to be assured that their children will be well cared for and safe in their absence.

~Sandy Costantino, Owner Neighborhood Nannies

Page 11: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Liability InsuranceLiability insurance is vital for nanny placement agencies since they operate in a high risk environment. For this reason, it is also often difficult for new agencies to obtain this much needed insurance.

A list of INA member industry service providers that specialize in professional and liability insurance for nanny placement agencies can be found in the member list section of www.nanny.org.

Nanny InsuranceIt can be time consuming to find health insurance and other benefits for nannies. Through INA members, nan-nies and families can easily obtain insurance information and quotes from reputable insurance brokers.

A list of INA member industry service providers that specialize in nanny insurance services can be found in the member list section of www.nanny.org.

Q&A

What liability does an agency owner have with regard to the actions of a nanny that he/she has re-ferred to a family?

An INA member agency/agency owner has the highest standard of responsibility to both the family and the nanny it has placed. Liability will depend on the relationship established with the family – was there a written or oral agreement, and what representations were made. The agency/agency owner will be liable for failing to follow through on representations made expressly, such as not performing promised references checks, and may be liable for any reasonably implied representations, such as ”This nanny does not have a criminal record.”

~Alan Friedman, Owner, A Choice Nanny New York, NY

Page 12: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

Value of INA MembershipOne of the most important steps of starting a new business is to be connected to your industry through a repu-table professioanl association. Being connected to the leaders of your industry is one of the best ways to stay ahead of the competition, to generate new business ideas and to cultivate meaningful industry relationships. If you are serious about your endeavor as an agency owner, please consider joining INA.

The following is a list of products available to you through INA. Please visit our website, www.nanny.org, to learn more about INA, to join or to access vital industry resources and publications.

Publications• A Nanny for Your Family• Recommended Practices for Nannies• Recommended Practices for Agencies

Tools• INA Family/Nanny Agreement• Quality In-Home Child Care: Professional Standards for Nannies• INA Nanny Basic Skills Exam• INA Nanny Credential Exam• Beyond Parenting Basics: The International Nanny Association’s Official Guide to In-Home Child Care

Q&A

How would you sum up your experience in the childcare industry?

I have been in this industry for over 20 years. While it will never make most of us rich, those of us who are doing it ethically, legally and with a deep concern for quality are making a good living and doing something positive for our community.

~Sharon Graff-Radell, Owner, TLC for Kids/Consultant

Page 13: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 4: DEVELOP STEPS AND TO-DOS FOR PREPARING TO LAUNCH YOUR BUSINESS

If you’ve finished your research and have found that starting your own agency is a viable business endeavor, you are probably very excited to move on to the next steps of launching your business. The following questions and considerations can be used as a guideline to help you prepare.

Determine Company Name • Will people remember it? • Does it sound professional? • Does it say what you do?

Determine Initial Service Offerings Full service (including temp sitting, elder care, doula, newborn specialist, housekeepers, etc.) or long term nanny referral only?

Determine Services You May Grow Into (See above suggestions)Develop the steps of your placement process. This should cover A to Z, from recruiting quality nannies to closing the placement successfully. This section of your “to-do” list should be quite detailed as it will give you guidance and organization when you actually begin placing nannies.

Develop Policies and Procedures (You will need to refer to these frequently – put them in writing!)

Set-up partnerships with outside services• Background Checking• Advertising/Marketing• Insurance: Health, Professional Liability, Rental• Payroll and Tax Service • Bookkeeping/Accounting• Agency Consultant• Attorney• Graphic Designer/Website Developer• Printer

Page 14: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

• Develop print marketing materials• Logo• Paper system – letterhead, envelopes, business cards, contracts, applications, etc.• Brochures• Advertisements and flyers

• Develop and launch website / setup Internet service• Setup office• Sign lease• Secure necessary insurance – renters/property insurance, liability insurance• Purchase office equipment and furniture• Implement phone system• Develop or purchase agreements – Agency/Family, Agency/Nanny, Replacement/Refund• Obtain state licensing (if required)• Obtain federal and state business tax IDs• Setup internal tracking and bookkeeping systems• Develop and launch advertising• Begin developing caregiver relationships• Begin developing client relationships• Start the placement process

A detailed “to-do” list will make the next steps of starting your business more managable. You will modify your “to-do” list on a regular basis, as your list will change as your business grows. You are

now ready to develop your timeline and your budget – it will be easier than you think.

Q&A

How much can I expect my business to grow each year for the first 3 years?

In my first year of business, most of the year was spent developing and implementing marketing and sales plans – I did not draw a paycheck all year. I set a goal in year 2 to grow by 50%, as I was busy “sowing the seeds” of potential success in the first year. Year 2 exceeded my goal. In year 3, I set a long-term goal of a minimum of 15% growth per year. Set realistic goals, but always strive to beat them.

~Stephanie Breedlove, Partner Breedlove & Associates

Page 15: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 5: DEVELOP A BUDGET

Developing a detailed “to-do” list will give you a good idea of the time and money required to get your busi-ness started. Your research and list of “to-do” items should make it easy for you to develop an accurate budget. Once budgeting development is complete, there are several options: begin doing business (assuming ade-quate funding), take out a business loan or extend your timeline until funding becomes available. The following is a sample budget. It covers sample expense and revenue items. It does not cover every item that you may need to include, but it can be used as a guideline for developing your own budget. At this time, do not worry about when you will need to pay for your expenses or when you will begin to recognize revenue. Instead focus solely on identifying your expense and revenue items. You should budget on an annual basis and then com-pare your budget to your actuals each month. This will allow you to access your profitability at any given time.

Developing a budget is an important step in preparing to start your business. Your research should have provided you with enough information to feel good about the accuracy of your budget estimates. The exercise of estimating expenses and revenues can give you a true sense of the up-front costs required to get started successfully. It also will show you how much revenue you should expect in the first year, and most importantly, if you will break even or turn a profit. Keep in mind that most businesses are not profitable in the first year. It is also recommended that you develop a long-term budget. Doing so will help you see that your hard work will be rewarded in years to come.

Page 16: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 6: DEVELOP A TIMELINE

After your budget is complete, it is very important to develop a timeline for launching your business. To develop a timeline, take the items on your “to-do” list and group common tasks together. Next lay out your timeline us-ing the groups of tasks. While your timeline will evolve and change, having a formal timeline drafted will allow you to easily see the impact of those changes and allow you to make adjustments when they occur. The follow-ing is a sample timeline. Please use it as a guideline only, as no two businesses will follow the same timeline.

My New Agency, Inc.Annual Timeline

Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. Legal Process Co. Name Tax ID Licensing Legal Help Procedures/ Tools

Processes Mkting. Matl. Ads/Website Office/Services Office Setup Outside Serv. Place Ads Implement Mktg.

Begin Placing (Example: Goal 3 placements per month..)

Modify/Improve Plan for the Future

It is typical for it to take several months to be ready for your first nanny placement. Your timeline is your best planning tool as it shows you how long it will take to have a consistent revenue stream. In addition, when you compare your timeline to your budget you will see how long it will take your business to be profitable. Half of the battle of starting a new business is being prepared for the effort, costs, and time required to be successful.

Page 17: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

STEP 7: ANALYZE, MAKE WELL-INFORMED DECISIONS AND PUT YOUR PLAN INTO ACTION

Your business plan is now complete! Developing a thorough business plan should give you the knowledge, comfort and confidence that you need to make one of the most important decisions of your life and to answer the question “Should I open a nanny placement agency or not?”

If the answer is no, you will fully understand the rationale as to why and you will be comfortable and confident in your decision. If the answer is yes, you will now understand the risks and commitment needed to launch your own nanny placement agency. Having this information will give you confidence, comfort and most impor-tantly, direction, as you strive for your business goals.

Q&A

How long before you drew your first paycheck?

My business was in planning stages for many months while I continued to work full-time at anoth-er job. And when I actually “opened the doors” it was probably at least 6 months before I took any mon-ey out of the business. I would advise others to not plan on taking a meaningful salary for 6-12 months if they aren’t starting out with a sizable front-end investment. At least this was my experi-ence, and my salary still fluctuates at times, as I pay myself after everyone else has been paid.

~Mary O’Connor, Owner, Nannies from the Heartland

Page 18: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

HIGHLIGHTS FROM THE 2009 INTERNATIONAL NANNY ASSOCIATION SALARY AND BENEFITS SURVEY

Information in this report is based on the year 2008

Six hundred and sixty seven (667) in-home child care providers responded to this survey. The respondents in-clude Nannies, Traveling Nannies, Temporary Nannies, Newborn Care Specialists, Doulas, Governesses, etc.

For simplification the title “Nanny” will be used to refer to all respondents.

How did you find your current position?45.88% reported using a local nanny placement agency16.34% reported using a local Internet job site or online classified15.14% reported using a word of mouth referral –networking 8.70% reported using an option that was not listed on the survey 6.30% reported using a national Internet recruiting site 3.6% reported using a nationwide placement agency 2.55% reported using a newspaper advertisement 1.55% reported using a local bulletin board

What was your gross (pre-tax) weekly salary in 2008? (Some respondents are part-time employees)10.79% reported earning $300 or less per week10.04% reported earning $500 per week 9.15% reported earning $600 per week 8.25% reported earning other 7.20% reported earning $700 per week 7.20% reported earning $550 per week 7.05% reported earning $650 per week 6.00% reported earning $850 per week 5.85% reported earning $350 per week 5.40% reported earning $450 per week 5.25% reported earning $400 per week 4.80% reported earning $800 per week 4.80% reported earning $750 per week 3.60% reported earning $950 per week 2.55% reported earning $1000 per week 2.10% reported earning $900 per week

Page 19: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

What is the profile of your employer family?66.16% reported working for a professional couple11.64% reported working for a couple where one or both parents work from home10.72% reported working for a couple where one parent is a professional/and one parent is at home 3.83% reported working for an independently wealthy individual or family 3.83% reported working for a professional single parent1.99% reported working for a divorced couple with shared custody1.07% reported working for a nationally known celebrity 0.46% reported working for a locally known celebrity 0.31% reported working for an internationally known celebrity

Is your employer withholding and reporting your payroll taxes?61.48% reported employers withholding both federal and state taxes27.49% reported employers not withholding any employment taxes 5.59% reported employers withholding federal taxes only 4.83% reported other 0.60% reported employers withholding state taxes only What benefits does your employer provide?63.19% reported receiving paid national and religious holidays61.51% reported receiving paid sick days 46.72% reported receiving 2 weeks paid vacation 33.95% reported receiving reimbursement for use of personal vehicle33.61% reported receiving use of an employer furnished vehicle29.08% reported receiving paid personal days 26.39% reported receiving more than 2 weeks paid vacation17.31% reported receiving 100% paid health insurance 12.94% reported receiving 1 week paid vacation 12.27% reported receiving cell phone allowance 11.93% reported receiving 50% paid health insurance 11.60% reported receiving membership to a health or country club 9.58% other 6.55% reported receiving paid registration and/or travel expense to professional conferences 4.87% reported receiving retirement plan contributions 4.71% reported receiving employer paid dues to a professional association 4.37% reported receiving employer paid continuing education or college courses 3.19% reported receiving disability insurance 1.01% reported receiving a clothing allowance

Page 20: Steps for a Successful Start · perience of building a successful business from the ground up. INA has tapped the resources of some of the most successful placement agencies in the

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