EEC Final PDF

KHOMANANI CONSULTING Caring Together For Life

Eyona Educare & Nursery Centre

Innocent Siwela | Lucindiso Sibeko | Kaily Benedict | Michael Braverman | Marc Hartwell

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Table of Contents

LETTER OF AGREEMENT ........................................................................................................................... 4 S.E.E. Model .................................................................................................................................................... 7

A. Layer One: The Entrepreneurial Core ............................................................................................. 8 1. Core Strategic Issues .................................................................................................................................... 8 2. The Entrepreneur ........................................................................................................................................... 10 Map 1: Weekly Activity Time Breakdown ................................................................................................................. 13 Table 1: Nomonde Strengths and weaknesses ........................................................................................................ 14 Table 2: Xolani strengths and weaknesses ............................................................................................................... 14

3. The Business Concept .................................................................................................................................... 15 Table 3: Revenue Drivers ................................................................................................................................................. 16

4. The Opportunity (Market) ........................................................................................................................... 18 Table 4: Market Segmentation Tree ............................................................................................................................. 21 Map 2: Customer Buying Process .................................................................................................................................. 22

B. Layer Two: Internal Operations and Resources ....................................................................... 24 1. Financial records ............................................................................................................................................. 24 Map 3: Economics of the Business ................................................................................................................................ 30

2. Operational Considerations ........................................................................................................................ 31 Map 4: Operations Process .............................................................................................................................................. 31

3. Internal Infrastructure .................................................................................................................................. 35 C. Layer Three: External Relationships and Activities ................................................................ 37 1. Marketing Efforts ............................................................................................................................................ 37 Map 5: Points of Customer Contact .............................................................................................................................. 40

2. Financing Needs ............................................................................................................................................... 40 3. Extended Network .......................................................................................................................................... 42

D. Concluding Remarks .......................................................................................................................... 44 Deliverables ............................................................................................................................................... 46

Deliverable 1: Create and Implement a bookkeeping system to allow for better decision making ......................................................................................................................................................... 47 1.1 Problem Statement ................................................................................................................................... 47 1.2 Desired Result ............................................................................................................................................ 48 1.3 Solution ........................................................................................................................................................ 48 1.4 Argumentation ........................................................................................................................................... 53 1.5 Implementation ......................................................................................................................................... 54 1.6 Next Steps .................................................................................................................................................... 57

Deliverable 2: Design and Implement a focused fundraising program ................................. 58 2.1 Problem Statement ................................................................................................................................... 58 2.2 Desired Result ............................................................................................................................................ 58 2.3 Solution ........................................................................................................................................................ 59 2.4 Argumentation ........................................................................................................................................... 61 2.5 Implementation ......................................................................................................................................... 62 2.6 Next Steps .................................................................................................................................................... 64

Deliverable 3: Create marketing tools designed to increase awareness .............................. 65 3.1 Problem Statement ................................................................................................................................... 65

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3.2 Desired Result ............................................................................................................................................ 65 3.3 Solution ........................................................................................................................................................ 66 3.4 Argument ..................................................................................................................................................... 72 3.5 Implementation ......................................................................................................................................... 73 3.6 Next Steps .................................................................................................................................................... 76

Deliverable 4: Create and Implement a process to achieve and maintain government approval and accreditation for 60 children. ................................................................................... 77 4.1 Problem Statement ................................................................................................................................... 77 4.2 Desired Result ............................................................................................................................................ 77 4.3 Solution ........................................................................................................................................................ 78 4.4 Argumentation ........................................................................................................................................... 81 4.5 Implementation ......................................................................................................................................... 81 4.6 Next Steps: ................................................................................................................................................... 82

Appendices ................................................................................................................................................. 83 SEE Model Appendix ........................................................................................................................................... 84 Appendix A: Business Strategy Plan .............................................................................................................. 87 Appendix B: Potential Funders Database .................................................................................................... 95 Appendix C: Market Segmentation Profile Map ........................................................................................ 96 Appendix D: Letterhead ..................................................................................................................................... 97 Appendix E: Admission Application Form ................................................................................................... 98 Appendix F: Official Government Flow Chart for ECD Registration .................................................... 99 Appendix G: EDC Government Regulations for Ages 0-‐6 & Aftercare ............................................. 102

Letter of Appreciation .......................................................................................................................... 110

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LETTER OF AGREEMENT EESA PROGRAMME

UNIVERSITY OF FLORIDA and UNIVERSITY OF THE WESTERN CAPE

23 June 2014 Mr. Vusi Eyona Educare Centre Exungeneni Street Zwelitsha Drive Nyanga 7750

Re: EESA PROGRAMME Dear Xolani, We first want to thank you for your participation in and support of the Entrepreneurship Empowerment in South Africa Programme. We extend you, your mother and your grandmother a warm welcome to the program. Our goal is to contribute in every way possible to the sustainability and growth of your business and make this consulting engagement a mutually rewarding experience. We look forward to working closely with you and using the opportunity to gain insight into your company. As we understand it, Eyona Educare Centre is primarily involved in providing care and education for children 0-5 years of age. Moreover, your business can be characterized in terms of developing children and preparing them for primary school. You face unique challenges in terms of funding, insufficient facilities, lack of resources, marketing, and bookkeeping. Yet, you have been successful in building a strong education system that increases the chances of success for your students. With this in mind, we see the primary focus of the consulting engagement to be a funding strategy, enhancement of your management practices, and an enhanced revenue model.. With the EESA Programme, the focus is on producing tangible deliverables that you can use. We will be working intensely with you over the six weeks, employing a methodology developed as part of the EESA Programme over the past eight years. Our first task will be to establish priorities in terms of your needs and what can be accomplished in the time that we have. We will be using the S.E.E. model (Supporting Emerging Enterprises) to assess your current situation and set the priorities. While things are likely to change as the relationship evolves, for the present we anticipate working on the following deliverables:

• Improving the existing business plan in order to access both government and private sources of funding;

• Creating promotional pieces outlining specific services and benefits provided by Eyona to attract more customers and enable growth;

• Developing and implementing a marketing strategy that will enable address different target audiences in the community;

• Implementing a focused fundraising strategy to more effectively attract funds from sources such as government grants, corporations, and non-governmental organizations;

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• Assessing operations and identifying opportunities for enhanced value creation for your students together with ways to achieve cost savings and leverage resources;

• Improving the bookkeeping process to allow for better decision making;

The key is that we work with you in producing solutions that you can implement immediately in the business to improve performance Our overarching goal is to serve your needs and build a relationship of trust with you. The EESA experience over the years has made it clear that the best consulting relationships are mutual ones---where both parties invest heavily. Our biggest requirement is your time. It is critical that we are able to meet with you for 2-3 hours per week over the next six weeks. We will be respectful of your time, as we know how valuable it is. But our hope is that we can establish regular meeting times each week. The other key requirement is that we get an intimate feel for your business. This means it is critical that we have access to your records, bookkeeping information, costs, and other insights that help us do a better job. Our commitment is to hold this information in the strictest of confidence. No one other than the professor will have access to it, or to any of the work we do for you. The engagement will commence on June 18, 2014 and will last until July 25, 2014. Our team will regularly meet with Professors Michael Morris, Eric Mueller, and Jamie Kraft, our faculty supervisors, and they will be working closing with us on the consulting engagement. Their contact details are:

EESA Office Economics and Management Sciences 3.34. EMS Building University of the Western Cape Ph: 021 959 9327 Cell: 074 975 3073 Email: [email protected]

We will work with you on implementation of deliverables as the consulting engagement unfolds. In addition, a final presentation will be made to you and the faculty mentors at the end of the program, in early August. The presentation and final report will cover the primary deliverables of the consulting engagement. In addition to making a meaningful contribution to your firm, we have some personal goals in pursuing this consulting relationship. We hope to learn from you. This opportunity will improve our skills as professional consultants. Further, it will help to expand our cultural awareness while simultaneously improving our understanding of how to apply business concepts in a township context. Your motivation and inspiration will provide us with a unique appreciation for the challenges confronting entrepreneurs in South Africa today. In the spirit on Masikhule, we plan to grow together with you and your business. We look forward to working with you and this opportunity for a truly rewarding experience. Once again, we thank you for your time and support. Please feel free to contact us for clarifications on these issues, if any.

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Yours sincerely, _______________________________ Innocent Siwela _______________________________ Kaily Benedict _______________________________ Michael Braverman _______________________________ Lusindiso Sibeko _______________________________ Marc Hartwell In acceptance of the terms outlined above: Signature: ____________________________ Xolani Vusi (on behalf of Nomonde) Eyona Educare Centre Date: _________________________ Faculty Supervisor: ________________________________ Dr. Michael H. Morris George and Lisa Etheridge Professor of Entrepreneurship Warrington College of Business Administration University of Florida

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S.E.E. Model

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A. Layer One: The Entrepreneurial Core

1. Core Strategic Issues

The core issues Eyona Educare Centre face are a lack of funding, insufficient resources,

minimum to zero marketing, inconsistent revenue flow, very low community awareness,

incomplete bookkeeping system, insufficient infrastructure for future growth, and an outdated,

minimal business plan. Khomanani Consulting will take an in depth look at these issues to

better serve the client.

Eyona excels from the operational standpoint. Over the years, the creche has developed

a successful child care and education model that prepares children for grade R. The centre has

a good reputation at the primary schools for teaching valuable life skills early in early stages of

development. However, it is struggling to fund this operation. Eyona relies heavily on

government grants as its main source of funding, but this resource has proven to be

inconsistent and unreliable. The creche is located in the Nyanga township, an extremely

impoverished area, where parents often struggle to provide the money to pay child attendance

fees, which many times results in Eyona not receiving all of this critical revenue each month. It

needs additional sources of consistent revenue to sustain, improve, and grow the venture.

Economic instability in the township and inconsistent government funding have made it clear

that another solution for financial intake is necessary. A funding strategy that targets sources

separate from the government and township community is the only viable option. The good

news is that multiple organizations exist who make extended efforts of giving to operations

that help provide education in impoverished areas.

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A significant issue holding the creche back from multiple sources of funding is the very

minimal and incomplete business plan. It resembles more of a rough skeleton of what a living,

breathing business plan should represent. Improving the minimal business plan will allow the

creche to have a foundation from which to operate as well as present a clear success plan to

potential investors and outside sponsors. Funding is not the only variable affected as a result.

By having a business plan laid out, the entrepreneur is forced to confront and address the

weaknesses and threats identified in the plan. Without a plan that goes in depth and really

understands the core spirit of the business, many of these weaknesses and threats will go

unnoticed and could ultimately dismantle the business from the inside out.

The bookkeeping system at Eyona is decent, but the necessary financial information to

begin making better management decisions does not exist. Interpreting the information from

the statements will help our entrepreneurs better understand the value of the business. It will

be necessary to understand the books in order to figure out how much money the company

needs to be sustainable and make changes to enable grow. This is all to achieve the goal of

decreasing and eventually eliminating dependence on government funding.

Eyona also wants to renovate and expand the facilities, which requires funds in the

form of donations or government funds because revenue from tuition payments cannot cover

all the costs. The owners believe an updated facility will help grow and improve the

business. Although expansion may seem to be the obvious path forward, a closer look reveals

that it may do more harm than good without first implementing the necessary infrastructure

for growth.

A large issue the centre is struggling against is the value perception of the creche by the

surrounding community. Currently, the Nyanga residents view Eyona as a simple babysitter

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service filling a void during the day. Although Eyona provides so much more, they have failed

to effectively market themselves in these terms. A marketing strategy that focuses on

communicating core values and the opportunity it provides to children and families who desire

life improvement options through the best education possible is crucial. To the Nyanga

township, Eyona is a part of its history. Twenty years strong, it is time that Eyona makes a new

future for itself by partnering with the community and building opportunities that are

appreciated for the real value. Without this step, Eyona will continue to be a typical creche in

the middle of poverty that struggles on a daily basis to make ends meet.

2. The Entrepreneur Eyona Education was started in 1994 by Nonceba Qondeki just after Apartheid ended. Today

her daughter, Nomonde, is in charge of managing the day to day operations of the business

and serves as the acting principal. As the second generation entrepreneur, Nomonde is now

the key decision-‐maker for the business, but is assisted in major management decisions and

growth management of the creche by her son, Xolani, and continues to listen to her mother’s

advice. Xolani joined the team 1 ½ years ago to assist in making sure his grandmother’s creche

survives and flourishes.

When starting the business 20 years ago, there was an interesting combination of push

and pull factors motivating the creation of Eyona. After working for her previous employer for

31+ years, Nonceba was laid off in 1994 at 54 years of age. This was coincidentally at the same

time that democracy was brought to the nation of South Africa. In this new era, South African

women were no longer forced to stay at home with the children; instead many found job

opportunities within townships and urban areas. She saw an opportunity to offer daycare

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services for the many newly employed women in the area who have young children. She had a

passion for children and early childhood education which ultimately influenced her decision to

go into business. The opportunity in the marketplace, combined with the push factor of

unemployment, was the perfect breeding ground for Eyona Educare Centre.

Nomonde started working in the family business when she was still in high school. Her

passion for Eyona developed the more she worked there after school, leading to her decision to

pursue this as her career upon graduating. Her heart is for the children, and not so much the

business side of things. She sees this in terms of number of children positively affected instead

of profit gained. She goes to trainings every year to stay updated on early childhood

development (ECD) and recently completed her national diploma for Early Childhood

Development at a level 5. She takes these trainings back to the school and trains the other staff

while implementing the new techniques and curriculum.

While Nomonde is the acting principal and involved in the daily operations of Eyona,

Nomonde’s son Xolani works on the business and growth aspects. He is looking at new sources

of funding to sustain and grow the venture. He would eventually like to take a step back and

work on other opportunities once the business is growing at a manageable pace. Xolani

graduated high school from the Cape Town CBD area and is currently enrolled in a six week

online entrepreneurship program at the University of Maryland. He works in the information

communication technologies (ICT) industry and possesses specific skills in the information

technology field which he has been utilizing in trying to modernize Eyona Educare Centre. He

is not involved in the day to day operations of the company since he has a day job and is

involved in other ventures. This could create a lack of focus on Eyona. He is acting somewhat

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as an interim general manager, which creates value but leaves a question of uncertainty for the

future.

Nomonde and Xolani have different goals for the future. Nomonde’s main goals involve

creating as many paying jobs within her community as possible and improving the facilities.

She hopes to empower the community by creating new jobs that could support the

impoverished parents of the children she cares so much about. She would like to pave the play

area for the children, close off all the open spaces in the structure, and build an office to make

this facility a better place for her and the children. On the other hand, Xolani is more focused

on becoming the premiere creche in the area. He talked about wanting to make the current

competition irrelevant by having the most programs and the best facilities. His other goals

include increasing funding, introducing technology to kids, organizing field trips that relate to

classroom topics, building a fence and parking area on the premises, and even creating a

marketing plan to attract more customers. His ultimate hope for the business is to eventually

have enough revenue from enrollment fees and outside sources of funding such as

corporations and NGOs to be completely independent from the government. An important note

he mentions is that before these goals can be achieved, many improvements to the in-‐house

infrastructure such as electricity and heat/AC must be implemented in order to support long-‐

term growth. A combination of their goals is needed to be successful. Nomonde is in this

business for the children and the community, which is what drives her passion, but for Eyona

to be successful, she needs to start treating it more as a business. That is the only way for it to

survive. Xolani sees it too much as a business since he isn’t involved in the daily operations. It

will be difficult for him to get his goals achieved if he doesn’t spend the time interacting with

the children and the community. Nomonde’s passion and Xolani’s business drive combined will

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help make a business. They need to get on the same page first for goals though. On the

operations side she needs to be trying to achieve the growth aspect and he needs to know

about the operations to pitch it to potential funders.

If Eyona can get the funding and increase its profitability, there is room for growth.

Once the facilities are improved, the capacity dictated by the government will increase,

therefore allowing growth in volume, all working to achieve the goal of being the best creche.

As we can see from the breakdown of Nomonde’s time, she is using it pretty efficiently.

Since the kids are at the facility almost the whole time she is there, it doesn’t give her free time

to waste.

Map 1: Weekly Activity Time Breakdown

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Table 1: Nomonde Strengths and weaknesses Strengths Weaknesses

Experience (6 years) Not growth oriented

Passionate for her work Addressing payment issues

Within community 50+ years Time resources occupied with daily school operations

As illustrated above, Nomonde’s core strengths lie in her experience working in the business

and understanding daily operations, passion and love for working with children and serving

the community, and the extended amount of time she has been an active part of her local

community (her whole life). These strengths, along with others, have helped Eyona Educare

continue to provide quality day care services to the Nyanga township. Nomonde does also have

some weaknesses when it comes to managing Eyona Educare. These include a mindset that is

not focused on growing and expanding the business, addressing payment issues with parents

who don’t pay, and having her time be almost fully occupied by daily operations leaving little

time for strategizing and decision making. Although she may not want to grow the business

and would therefore not view this as a weakness, her son, Xolani, has large aspirations for the

future of the business and his mother’s mindset could slow the process of achieving these

goals.

Table 2: Xolani strengths and weaknesses Strengths Weaknesses

IT skills Limited knowledge of operations

Creative mindsets Distracted by other opportunities

Researching skills Financial skills

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Xolani excels in high energy and is very passionate about finding impactful solutions to

create sustainability for the creche. He is very devoted to his family and hates the thought of

the centre going under after his family worked so hard to create it. The combination of the

strengths listed creates an incredible mix for success if guided to the correct path. His creative

mindset is always exploring new ideas and trying to create new possibilities for the centre. His

background is in technology, so he can help with managing social media and websites for the

crèche. He has been very proactive in researching potential funding options and ECD industry

data. This will be useful when trying to grow the business. The downside is Xolani is only

serving part-‐time. He is not completely committed to the creche because he is already busy

with other responsibilities throughout the day. He can be labeled as being distracted by other

attractive opportunities. This is where the disconnect happens with Xolani because he does not

know exactly how the business runs yet. Because he is only at the creche a few hours out of the

week, he is unfamiliar with key aspects of daily activities such as buyer behavior.

3. The Business Concept Eyona Educare Centre offers the service of early childhood development education and

afterschool care to children aged 0-‐5 and children in Grades R and 1. The creche offers two

classes, one for children 0-‐3 ½ years old and another for children 4-‐5 years old. Eyona works

on intellectual and social development for the children to provide a safe and nurturing

environment for them, while also preparing them for entry into primary school. Eyona follows

a curriculum from Sector Education and Training Authorities (SETA) which highly resembles

the outline of grade R curriculum. The curriculum includes basic English phrases, counting,

days of the week/month, and basic addition/subtraction. It is a very interactive curriculum

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that utilizes group learning and focuses on developing linguistic, cognitive, and motor skills.

This has led to positive reviews from the local primary school teachers that Eyona students are

more prepared than the average entry level student. A good reputation has helped Eyona

retain clients, develop family loyalty, and receive referrals. The centre has been very good

about following the curriculum and staying true to it’s purpose.

In addition to the school services, Eyona Educare Centre offers aftercare services. From

16:30-‐18:30 the children can stay at the creche until a family member can pick them up. This

allows for parents who have long workdays to enroll their children at Eyona. Young children

from the local primary schools are also allowed to enroll in after school services where

Nomonde watches them and assists them with their homework. In total, Eyona Educare Centre

has 3 revenue drivers: 0-‐3 ½ years old class, 4-‐5 years old class, and aftercare services. This

showcases that both the breadth of services and depth of services are limited. The creche has

not tried to offer additional services or add-‐ons within each category.

Table 3: Revenue Drivers 0 – 3 ½ yrs old

R200 per Month

4-‐5 yrs old

R130 per Month

Aftercare 0-‐Grade 1

1. Already registered: R50 per Month

2. Not Previously registered: R70 per month

Eyona Educare Centre was one of the first creches established in the Nyanga area. At

the time Nonceba established the business there were few competitors. Over the past 20 years,

the market became saturated when people realized the ease of entry. Now there are six other

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educare centers in the immediate surrounding area. Eyona has little sources of differentiation

from the other creches other than their longevity in the area. Eyona needs to develop new

programmes and activities and upgrade its facilities to set itself apart from the other creches in

the area. If they could offer unique activities such as field trips or technology training, they

would have an easier time convincing families to come to their school. In order to gain a

competitive advantage, Eyona needs to generate new sources of value creation that set them

apart.

Experience in the industry for the past 20 years has led them to revise the system until

a successful model was created. The value created for the students is that they get a tried and

true education system that will be successful in providing preparation studies for entrance into

primary schools. Eyona creates value for the parents by providing a safe haven for their

children and allows working parents to provide income for their families. A lot of times

parents will leave their children home with older siblings that are only a few years older.

These older siblings do not have the proper training to take care of their young siblings. The

educational development of these children is extremely valuable to the community and their

families. There has been evidence of children that go to Eyona having a lower dropout rate in

high school. The problem is that even with so much value presented, parents cannot afford the

services, nor do they fully grasp the potential benefit. This creates an area of profit that is not

being capitalized on.

Eyona is located in Nyanga, an extremely impoverished area with high levels of crime

and unemployment. Within this location, a premium pricing model is unrealistic so Eyona

subsidizes the student fees with government funding. The government funding and tuition

barely covers the costs. The Health Department sets a capacity of 30 children that Eyona can

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enroll. These factors make Eyona a low margin, low volume business. One of these variables

needs to change in order to be sustainable in the long run. Eyona is currently trying to get

capacity raised by including the space of one of the containers. This would raise the volume,

government funding, and profitability. The biggest obstacle to obtaining this new capacity

increase is an unpaved floor, which the government inspectors deem a violation and therefore

will not give an official capacity ruling to provide funding for the costs of paving the floor.

One of the core attributes that Eyona possesses is its reputation within the community.

It receives good word of mouth referrals for its success with students. There is a history of

families having all the siblings and relatives going to the same creche, so a good job with one

student could lead to 10+ students in the future. This relationship can serve to be very valuable

if it is managed correctly. Eyona currently enjoys a few customer relationship trees such as

this.

4. The Opportunity (Market)

The initial opportunity captured by the Vusi family in 1994 was created by the ending of

Apartheid in South Africa. Along with the ushering in of democracy, groups of people that had

been extensively discriminated against suddenly had freedom to pursue education, careers,

and their own happiness. These newly opened doors allowed township parents to better their

lives through employment in new sectors, often having no place to leave their young children.

Eyona Educare Centre, being the first creche in the township, provided a simple, yet innovative

solution to the problem. Fast forward twenty years and parents are still absent from the home

during the day for multiple reasons. In a poverty stricken neighborhood, the need for safe

places for children to go is higher than anywhere else. Many children are often found playing in

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the streets without any supervision. While safety is a big concern, simple provision cannot be

ignored. Most teachers agree that during early development in children, nourishment is crucial

and cannot be overemphasized.

Following in Nonceba’s entrepreneurial footsteps, Nomonde and Xolani are continuing

operations at the creche in an effort to address these issues. While safety and nourishment

provision are still major concerns for children all over the world today, parents and schools in

South Africa are now realizing that success in primary and secondary school begins with

preparation before the first day of Grade R. Schools have created an informal system to

increase rankings and value of the schools through recruiting the best students from the best

educare centres. While entrepreneurship is certainly the future of South Africa, education is

the catalyst. This incentivizes educare centres to provide the best curriculum and development

strategies to attract the best teachers, caregivers, and children. If top schools are targeting

students at certain creches, they are generating a lot of value awareness which translates into

profitable traffic.

The relevant market the creche targets is defined as parents living in or around the

Nyanga township, have children too young for Grade 2 in primary school, and desire caregiving

skills for their young children. If Eyona is really going to expand though, they need to place an

emphasis on having superior educating skills. It is understandable that the quality of education

is not as crucial a factor when parents are just concerned about the safety of their children, but

if they want to be the best in the area, they need to provide the best quality of education.

In South Africa, about 19,500 Early Childhood Development (ECD) centres exist serving

around 836,000 children of which more than half live in poverty conditions. Nyanga ECD

saturation is consistent with the national figures with seven centres serving the community.

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Nyanga currently holds a 1.7 child per household rate with 15,993 households according to the

Nyanga 2011 Census. With unemployment reaching 45%, the ability to purchase becomes a

major factor in determining relevant market size. For the purpose of analysis, the relevant

market is defined as households with children ranging from ages 0 to 7, income greater than

R3,200 per month, and resides within the Nyanga township including the areas Black City, KTC

Informal, New Crossroads, and Nyanga SP. With the relevant market parameters set, the total

number of households within the target market is 1,408. Taking into account the 45 children

or 26 households that Eyona currently does business with, only 1.8% of the total relevant

market is being captured.

In accordance with national data, an average of 300 children or 176 households should

be enrolled in the seven ECD centres in the township. In effect, if Eyona is only reaching 26

households, 75% of the children enrolled in Nyanga ECDs are seized by the competition.

However, if the amount of 1,408 households is an accurate account, of which the team suspects

it is, a total of 79% of the total relevant market lies inside the demand gap. 79% calculated

against an average price per child (R150) at Eyona equals a profit potential of R282,540. Again,

a major variable the team must consider in validating a market hole of this size is the level of

poverty. The South African government does not recognize an official poverty line, but for

analysis purposes and in accordance with the average number of persons per household in

Nyanga, the minimum ability to purchase is set at R3,2000 per month per household. If this

amount is correct, a huge amount of revenue is open to anyone to capture. However, if this is

not the case and the poverty level amount is higher, potential profit could be greatly affected

and the ability to purchase amount must be redefined.

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Table 4: Market Segmentation Tree

• Indirect clients may exist in form of government funding and institutions that support

educational programmes.

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Map 2: Customer Buying Process

Shown above is a generic process parents would follow when enrolling their child in an

educare center such as Eyona. When marketing their services, Eyona relies very heavily on

word of mouth and community referrals. Although this effort may be sufficient for the very

localized area, any potential customer from neighboring areas would encounter a difficulty in

finding information and testimonials about Eyona. This is an area of the selling process that

could be improved upon. It efforts were made to make surrounding areas aware of Eyona,

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more customers could be brought in when customers reach the 2nd and 4th steps of the

buying process.

At the moment, customer loyalty to Eyona is purely relationship based to the creche’s history

in the township, as well as the lack of any marketing strategy. Because the creche was the first

educare centre in Nyanga, most people are familiar or have personal relationships with the

Vusi family. Although relationship based loyalty can be great, and is often a very good indicator

of customer service, Eyona is currently not providing any other reason for customer loyalty.

Creating a deep investment for the parents through the services provided to the children is a

path that could help to push Eyona to the next level and into brand advocacy. This is necessary

because even with a deep family history in the area, the reach of personal relationship cannot

extend to the entire market. Once a process for service quality is in place and is being

consistently executed, service quality will often produce relationships with the customer

making the loyalty even stronger.

The educare industry is extremely saturated and the residents of Nyanga have many

options to choose from when deciding which creche to send their child to. There are currently

six competing educare centres in the township with two in the immediate area to Eyona.

Etafeni is the main competing centre and offers a deep mix of services. The centre offers ten

diverse programmes ranging from pre-‐school care to community outreach programs geared

towards helping those infected with the HIV virus. Its marketing efforts are very sophisticated

and have created regular revenue streams with the largest source of income stemming from

online donations. The downside to Etafeni targeting this niche market is that it limits the

potential customer base. This is good for Eyona because it can capitalize on the market not

acquired by the competitor.

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B. Layer Two: Internal Operations and Resources

1. Financial records Financial records are crucial for any business to be successful and make sound

management decisions. Eyona has not really developed a bookkeeping system that accurately

tracks revenues and expenses even though they have been around for 20 years. Eyona uses

cash basis accounting. Currently Eyona is not registered to pay the VAT because it makes less

than one million rand per year.

Current Recordkeeping System

Nomonde is in charge of the record keeping. She spends approximately 1 ½ to 2 hours

per week doing so. She keeps all of her receipts in order to track expenses. At the end of each

month she records the revenue she receives from parent fees and government subsidies,while

the expenses for the month are recorded a Statement of Income and Expenditure that the

government requires her to fill out to receive the subsidies. At the end of the year she sends all

her receipts and records to CW Accounting who compiles the information into financial

statements.

While Nomonde is keeping track of the cash inflow and expenses, she is not tracking the

expenses and revenues by date or description. By not doing so, it is hard to get a full picture of

what is going on in the business. In order to see which revenue driver is more profitable, the

parent fees need to be broken up by individual student and which age group they are in. Doing

so allows us to see which students have paid and which age category is more profitable. The

expenses also need to be tracked by date and who it is owed to. By providing detailed records

of expenses, Eyona can evaluate the information to see where and why expenses vary to make

more informed business decisions. Eyona should compile this basic information in a ledger

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that would track cash inflow and cash outflow. Recording the revenues and expenses by date

would show their current cash situation and allow them to see if they have enough cash on

hand to cover the expenses.

The Statement of Income and Expenditure that Nomonde is required to fill out for

government subsidies is missing some information. It does not include the electricity/water,

cleaning, or accounting expenses found on the income statement from her accountant. She uses

this form as her primary record keeping system, so it is a problem that expenses are missing

from this document. She should keep another form that includes all the expenses each month

and then transfer that data into the government form. By creating her own form, she will have

all the necessary information and a more accurate picture of her financial position as opposed

to waiting until the end of the year for her accountant to properly record all the expenses from

the receipts.

Nomonde told us that she thought five students currently were not paying, and others

would pay randomly throughout the month even though the fees were due by the 7th of each

month. After looking more at the financials, it was discovered that are a lot more not paying

that she originally believed. Lacking a system of how much she was supposed to make each

month verses how much she receives makes it difficult to get an accurate picture of monthly

parent revenue. An accounts receivable tracker would give her an easy way to track who still

owes her money and when they pay it.

CW Accounting provides Eyona with an income statement and balance sheet at the end

of the year. The income statement is helpful in seeing all the expenses being incurred and

where the revenue is coming from. However the balance sheet does not give an accurate value

of the business. It does not list the equipment or buildings as assets. This seriously

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undervalues the business. This information is not utilized though because Nomonde doesn’t

understand them. She only gets them drawn up because the government requires her to for

funding purposes. She needs to understand how these statements can be useful in

management decisions such as budgeting and deciding staffing. Nomonde is spending money

on an accountant but she is not getting the full value from the service since she doesn’t

understand how to use it.

Financial Statements

Khomanani Consulting took the Statements of Income and Expenditure sheets for July

2013 to May 2013 and bank statements and constructed financial statements. Please refer to

the Appendix to see the complete cash flow statement, income statement, and balance sheet.

When constructing these statements, we noticed that the bank statements did not

always match up with the Statements of Income and Expenditure. A specific example would be

the bank fees, where they would be recorded lower on the government form than they actually

were. Not accurately recording information can be a major problem because it makes it look

like a business has more or less cash on hand than it actually does.

The cash flow statement showed a better picture than expected. Eyona had mentioned

that they really needed more funding, but according to the cash flow statement, there should

be R26,775 as an ending cash balance that can be reinvested in the business. This is great since

Eyona wants to upgrade their facilities.

After looking at the income statement we could see that Eyona made a net profit every

month except May when they had a higher than normal maintenance fee on their building. One

thing that stood out though was how the food charge lined up with the parent fees. The food

expense is the only variable cost and should therefore go up when more students are enrolled,

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however there did not seem to be a correlation between parent fees and food expenses. For

example, March had almost double the parent fees of February yet it had a lower food expense.

This does not align with how variable costs should work.

The balance sheet we compiled gives a better representation of the value of the

company. It includes the value of the containers donated, the original building, and the

equipment at the school. It is important to include all the assets of the business and not just the

cash.

One thing that didn’t totally align was the parent fees. If there are on average 40-‐45

students enrolled, the parent fees should be higher than is currently recorded. It could be off

due to her not accurately tracking the parent fees or due to her keeping money somewhere

outside the bank account. It is crucial that the financials are accurately recorded to make the

best management decisions.

Economics and Costing Structure

Eyona educare centre has three revenue drivers: 0-‐3 ½ year olds, 4-‐5 year olds, and

aftercare services. The prices for each are per student:

0 – 3 ½ yrs old

R200 per Month

4-‐5 yrs old

R130 per Month

Aftercare 0-‐Grade 1



The only variable cost for Eyona is the food budget, since that is the only cost that varies

based on the number of students present. The rest of the expenses are fixed costs that are

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incurred regardless of the number of students. Some of the key fixed costs are the salaries, gas,

and electricity/water. The following model shows the relationship between the revenue

drivers, operating leverage, volume, and margins.

Breakeven

Now that the income statement is complete, it can be used to determine breakeven.

First the contribution margin needs to be determined.

Contribution Margin= Price-‐ VC/unit

We used the month of May to determine the CM since that is the month we had the attendance

record.

The price had to be averaged among the various revenue drivers. The 0-‐3 ½ year olds made

were 52% of the students and the 4-‐5 year olds made up 48%. We then worked under the

assumption that since the majority of students don’t stay for aftercare, that 75% goes home

and 25% stays.

P 0-‐3 ½= (200 x .75) + (250 x .25)= R212.50

P 4-‐5= (130 x .75) + (180 x .25)= R142.50

Avg. P= (212.5 x .52) + (142.50 x .48)= R178.90

The VC/unit came from dividing the variable cost (food) by the number of students (the unit of

analysis).

VC/unit= 4000/42= R95.24

Now the CM can be calculated.

CM= 178.90-‐ 95.24= R83.66

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Once the contribution margin is calculated, the breakeven can be determined. A modified

formula of breakeven needed to be used due to the government subsidizing Eyona. These

government subsidies go toward paying off the fixed costs.

BE= Total Fixed Costs-‐ Gov’t Subsidies/CM

BE= 9998-‐7920/83.66= approximately 25 kids

To determine BE in Rand, the percent variable contribution margin (PVCM) needs to be

calculated.

PVCM= P -‐ VC/unit/ P= 178.90-‐95.24/ 178.90= 46.76%

BE= TFC-‐Govt Subsidy/ PVCM

BE= 9998-‐7920/.4676= R4,443.97

The breakeven might be slightly off due to May having one of the highest fixed costs, but it

should be pretty similar in the other months.

Other Indicators

If you look at the percent of revenue on the income sheet, you will see that the majority of the

revenues come from the government subsidies, over 75%. Eyona has a goal to get off the

dependency of government funding, but that will be a difficult goal considering it is their main

income source. They should look at reducing the dependency on the government funding to

start.

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Map 3: Economics of the Business

Since the majority of the costs are fixed, Eyona has a high operating leverage. They have

low margins because of the low prices they charge. They cannot charge parents any higher

prices due to the market price and economic demographics of Nyanga. Eyona has a capacity of

30 students set by the Health Department, but has 45 students enrolled. Since they are

technically over capacity, they are classified as a high volume business. This model shows

where Eyona can improve to become more profitable. Since prices are relatively fixed, Eyona

needs to look at either increasing margins by lowering costs.

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2. Operational Considerations

Map 4: Operations Process

Eyona Educare provides day care service for children ages 0-‐5 beginning at 06:30, as

well as aftercare for these kids and kids in grades R-‐1 from 16:00-‐18:30PM. All kids must be

picked up by parents or older siblings by 18:30 every evening. Nomonde arrives at Eyona

every morning just before 06:30 to prepare for the first arrivals of kids shortly after. Once the

early birds arrive, the gate is opened for them and they are welcomed in by Nomonde’s warm

smile.

The fact that not all the kids arrive at the same time, or even within a couple hours of

each other, does make the job of teaching and caring for each child equally challenging. If a

child arrives even an hour late, they have likely already missed the most important meal of the

day; breakfast. The child then has to wait for snack time to eat, which is a few hours after, and

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even longer until lunchtime. This creates a difficult situation because it is hard enough to get a

4 year-‐old to focus on story time, and nearly impossible when the child has not eaten all day.

A late arriving child also causes interruptions to the daily operations of teaching and

caring for the children. It can be very distracting to the other children to see their classmates

arriving at all times throughout the day. A large contributor to the inconsistencies in child

arrival times are the fact that older siblings are often responsible for getting the child ready for

school and dropping them off in the morning because the parents have already departed for

work. Scenarios such as this are completely out of the control of Nomonde and her

grandmother, so something must be done to alleviate the stress put on faculty and children

caused by late children.

The only real bottleneck that is limiting the capacity of Eyona Educare to provide

daycare services is the size of their facilities. This issue is not a direct operational

consideration and will be discussed further in the internal infrastructure section of this layer.

Because the business has been operational for 20 years, process and information flows

between Nomonde, her grandmother, and the three employees and volunteers are relatively

smooth. It appears, after spending time at the center while kids are actually present and

teachers are working, that everyone is on the same page when it comes to the daily operations

of the business. The one exception is the extent of knowledge that Xolani posses about the

business. Even though he is the one who takes on the responsibility of applying for many

different sources of funding, he is still unsure of certain aspects and specific details of the

business. It would be more beneficial in acquiring funding if he was well versed in all aspects of

the business, from story time to financial records. We have found ourselves going back and

forth between Nomonde and Xolani for information, often times receiving conflicting facts.

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The only internal control that we observed while spending time at the educare center

was that the entry gate is promptly closed and latched whenever anyone enters or exits the

facility. This is a good policy to have considering the location and surroundings of Eyona. It

helps to prevent any kids from wandering into the dangerous township and keeps unwanted

visitors out.

Health and safety is obviously a major concern when there are 45 children in one small

area. They do have one large fire extinguisher, but thats about it. There is a very large propane

tank hooked up to the gas grill that they use for cooking meals, as well as heating in the cold

winter months. Although this is where the fire extinguisher is, this area still poses a safety

concern for Eyona. There are no security measures in place such as cameras or alarms, and no

smoke detectors either. The toilet room looked somewhat clean and there was running water.

We could not tell if there was soap for the kids and employees to wash their hands with

though. Government funds may increase if these health and safety issues were addressed

before inspection.

Nomonde and her staff are pretty diligent when it comes to performing necessary

administrative procedures. Attendance is taken every day to keep track of students and

become aware of concerning patterns. The attendance sheets are kept on hand as reference

points to see how many kids attended on any given day. Nomonde also keeps attendance

sheets and records of her two employees and three volunteers. Even though Eyona outsources

their bookkeeping to a professional accountant, they still keep track of revenues and expenses

on a simple, government formatted sheet which they use to apply for government grants. This

is extremely necessary because the majority of the revenue they receive is from these

government funds. Therefore it is crucial to keep up to date with the recording of food costs,

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salaries, and parent fees so that they may submit accurate forms to the government to receive

precious funding.

Eyona’s current capacity is near full utilization. Besides the fact that they are not legally

able to accept more children before upgrading their infrastructure, their current staffing

structure could not handle an increase in children. When all 45 children do attend, it is very

hectic and the staff is extremely busy caring for all the children. If any more kids were enrolled

there would be a decrease in the quality of services being provided, leading to dissatisfied

customers and potentially unsafe conditions.

Resource productivity is an important concept for Eyona because all of their resources

are extremely constrained. Whether it be money, time, utilities, or school supplies, it must be

conserved and used to its full potential to achieve the highest productivity. Currently they do a

good job ensuring resources are being used to their full potential, spending only when

absolutely necessary and making school supplies last.

The only customer service issue that Eyona encounters often are parent’s lack of

payment. The way in which they handle this situation is by simply hoping that the family will

make payment in the following month. They never turn down an enrolled child, even if the

parent does not pay for a month or two. To Nomonde, serving the community to the best of her

abilities is much more important than turning a profit.

The quality of services is a major area in which Eyona claims they excel. Nomonde and

her employees are all long time workers at the educare, so they are all aware of the high

quality standard in place. Because the same three people are there day in and day out, there

are quality checks built into the process in a sense. If one employee sees or experiences a lapse

in the quality of childcare, they will not hesitate to call one another out and ensure the high

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quality standard is maintained. There is not much room for error here, because it is not just

products being produced, there are children’s lives at stake every day Eyona opens their gates.

Below is a map visualizing the application process, as well as daily procedures that must be

followed.

When analyzing the operations process of Eyona, there is one crucial flaw in the

admissions process currently in place. The question is posed to the parents during the

meeting/interview if they are able and willing to pay for daycare services. If the answer is yes,

often times the payment will still be neglected with no consequence for doing so. Even if the

answer is no, Nomonde still feels morally obligated to provide her services to the family. In

their 20 year history, they have never turned down a child for admission due to a lack or

inability to make payment. This behavior, although extremely difficult to change, is negatively

affecting the business in that precious revenue is being missed out on while food costs for

these children are still being incurred.

Another important note relating to the operations process is the additional offered

service of aftercare that some families take advantage of. At 16:30 some children get picked up

from Eyona and go home for the day. However, some stay until 18:30, and a small number of

children in grades R-‐1 come to Eyona until the final departure time. Also at this time, between

one and three volunteer high school students show up to assist with aftercare services and

relieve the paid employees (besides Nomonde) of their duties for the day.

3. Internal Infrastructure

Eyona Educare Centre is a registered educare centre. The educare centre is located in

Nyanga, one of the poorest and dangerous parts of Cape Town. Initially the centre was run out

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of one wooden container. Fortunately, Competitive Capabilities International (CCI) donated

two containers. One is being used as a kitchen where meals for the children are prepared. The

second container serves as a classroom for children aged between 4 and 5. Part of the learning

curriculum of children who attend educare centres is encouragement to take part in activities

outside the classroom. Due to a limited amount of space, children play at the local park. This

gives rise to issues of safety and security. As stated above, Nyanga is not the safest area and

allowing children to leave the premises despite supervision provided by the educators is not

preferable. To alleviate this problem Nomonde has plans to cover a larger portion of land, this

may be a lenghty process as a plan by an architect needs to be designed and sent to the

municipality for approval.

At present Eyona Educare Centre has three employees one of which is Nomonde. The

two employees have no formal training let alone a Matric certificate. Nomonde feels as though

she cannot replace them, as they have been loyal employees of the business for quite a number

of years. Additionally, three high school students voluntarily assist with after care. Students

are only remunerated for their services if they are asked to lend a hand at short notice or if an

emergency arises. Apart from Nomonde being an educator at the centre, she also oversees the

running of the centre and management of the business.

Given the fact that Nomonde heavily relies on the training programmes that she attends

in order to gain more knowledge about educare, it can be expected that her information

systems expertise are not up to scratch seeing that she has not received any formal training.

Currently she is in charge of recording all information pertaining to registering children, the

attendance of employees and children.

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In addition, she uses a basic template provided to her to record all monthly expenses

and income. On the other hand, financial records are generated by CW Accounting. Nomonde

gathers all the receipts and relevant information throughout the year and hands them over to

the accountant as the need arises. Eventually, comprehensive financial statements are

produced. A potential area of concern could be the analysis and use of these financial

statements. It is unclear if Nomonde fully comprehends what the numbers are saying about

her business and if she is able to act accordingly based on the information.

C. Layer Three: External Relationships and Activities

1. Marketing Efforts All of Eyona Educare Centre’s marketing efforts are focused on word of mouth

coverage. The creche currently operates on no formal or informal marketing strategy. The

centre has been operating with a small town mindset where everybody knows their neighbor.

It is clear to see though that the creche is not even close to reaching every potential client.

Every parent wishing to register a child must first complete an application stating basic

demographic information, but critically missing are any questions about why registration is

desired, how they learned about the creche, or what they desire from the creche. All of these

are simple, yet vital areas necessary to produce actionable marketing information.

Even with no marketing strategy in place, the centre is currently positioned as an early

life educational and social development child care centre for children up to Grade 1 that

provides a safe place for parents to send their children during the day. While this positioning

strategy, however informal, has worked for the centre over the years, it will not be enough to

fuel any type of growth. By altering the position toward parents who appreciate or desire a

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great kick start to their child’s education, the centre can begin to focus in on not only a more

specific market segment, but a potentially more profitable segment. By pushing even further,

the centre could come to be recognized as a superior educare centre known for its prestigious

curriculum where only the best primary schools recruit from. This segment would be more

profitable due to the fact that the centre’s current paying clients are consistently inconsistent

with their payments. By targeting parents who have a high perception value of the services

provided, payments will be more consistent and the parents will be more likely to comply with

the centre’s policies. If the centre could be moved to the premium creche sector, a whole new

range of possibilities will open up.

The centre’s targeting approach is really non-‐existent, but should begin to market to

parents with kids age seven and under who live in the area and make at least R1000 per

month. The income variable is difficult to address with 73% of the township’s residents living

in poverty. This variable may need to be a part of the segmentation process that comes

gradually as the centre grows and surrounding economic status increases. Another possibility

would be to not incorporate the minimum income variable and transition focus to independent

sponsors instead. Many organizations look to give charitably to educational facilities.

The creche has enjoyed twenty years of serving children and the parents, but

unfortunately the brand and awareness has not grown accordingly. The centre has made no

effort to attract funding through an online presence. Outside of Nyanga, recognition of Eyona is

close to zero unless someone has had a personal experience with it. This is an area of

incredible opportunity to expand the centre’s presence not only for outside funding but to help

with consumer advertising. While many people in the township read the newspaper and listen

to the radio, facebook has become the top media channel. By tapping into this channel, the

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centre may be able to communicate its values, services, and community initiatives to its market

more directly.

The organization CCI donated parts of the facility and also donated its services to paint

the facilities. Included in this was the name of the centre in big, bright colors. After some

repairs were necessary, the name is no longer intact and needs to be restructured. This is

potentially causing people walking by to undervalue the centre or create invalid assessments

of the quality of the creche. The organization is planning on repainting the facility, but a more

long term solution needs to be created and implemented.

Eyona’s pricing models present an unusual situation. The prices are not meant to be

competitive, but are also not creating a premium value effect. The prices really have no design

in mind at all. With no design, the prices fail to create any sort of competitive advantage. Even

though prices are extremely low, payments are often late or never come at all. Again, this

signifies a disconnect between the parents currently purchasing the services and the

perception of value provided.

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Map 5: Points of Customer Contact

There is nearly an infinite amount of customer contacts when you operate a business. Listed

above are a few key ones that could affect the decision making process of customers, either in a

negative or positive way. It is very important to ensure that as many as possible, if not all

contact points portray a positive image of Eyona. If even one moment of truth is not ideal, it

could result in the loss of a sale as well as negative publicity from word of mouth.

2. Financing Needs Eyona Educare Center is still owned by the the original founder of the business,

Nonceba. However, her daughter Nomonde is the acting principal and is in charge of the daily

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operations. Neither her or Xolani have any ownership of the business. Nonceba is the 100%

owner and principal on paper, but does not play a critical role in the business anymore. Eyona

has no external investors or stakeholders in the company, making it a fully family owned and

operated business.

The financial structure of Eyona is 100% equity financed, with no debts or payables to

speak of. Their main assets have been donated, and the business was launched initially with

personal funds without any loans. Even though the government does provide the majority of

their revenue, they’re not required to make payment and don’t have any interest expenses. If

the company were to experience significant growth in the future, a bank loan may be necessary

to upgrade the facilities.

Eyona’s current access to capital is limited to government grants and a very small

amount of donations from private companies and community organizations. The cost of

accessing this capital comes from the process of applying and the time associated with doing

so. Because no interest is paid for these forms of financing the cost of capital is limited. For

future financing decisions the cost of capital will need to be factored in and considered.

The assets that Eyona currently have are all long term assets such as the facilities in

which they operate and the tables, desks, and chairs within each classroom. There are no short

term assets because Eyona is a service provider and therefore has no inventory.

The current financing needs are at a higher level than what they have been receiving

from government subsidies. For future growth of the business to be possible, access to

alternative sources such as fundraising events and private company sponsors will be

necessary due to the inconsistency in the government’s funding abilities.

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By running the business, Nomonde and her employees are not only supporting

themselves, the families of which the kids who are enrolled are also being supported by Eyona.

Many working parents are dependent on the services of Eyona to provide a safe and

productive environment for their children during the week.

3. Extended Network The extended network of Eyona Educare is a crucial relationship that must be

effectively managed since such a large percentage of funding comes from external sources.

Arguably, the most critical relationship would be one with government officials. Up to 80% of

the revenue in some months is from government subsidies. The amount that the government

provides for Eyona is determined by a visit from a government worker who examines the

facilities and bases the funding amount off of a set list of criteria. However, Xolani insists that

this criteria is extremely inconsistent and often negatively affects the amount of money they

are awarded. He does have credibility with such statements given the variation that is shown is

government subsidies on cash flow statements. One way to eliminate the guessing game that is

currently being played and be able to earn consistent funding would be to nourish a

relationship with the workers who come to Eyona to determine the funding amount. However,

although governments do not have a great history with giving away money, it seems odd that

there would be no set rules or criteria by which the creche would be evaluated. The

Department of Social Development is the division of government in South Africa that is in

charge of awarding funding for early childhood development centres. The team is still looking

into this in order to find a way to avoid the loss of funds for failing to comply to certain ECD

policies set in place.

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Eyona also has some very important connections within the CCI corporation. CCI is a

large South African company who donated the two shipping containers that Eyona currently

uses as classrooms. By continuing to foster this relationship with such a powerful entity could

lead to many new funding opportunities for Eyona. Additionally, creating new and meaningful

relationships with private companies could be a great opportunity to eventually achieve the

ultimate goal of not having to rely on the government for funding.

One source of free labor that Eyona does take advantage of is high school students

volunteering with after care once their school ends. This is extremely beneficial to Eyona

because their paid employees are able to go home at 16:00 instead of staying until 18:30.

By providing high quality educare services for children, Eyona claims that local primary

schools appreciate the difference in children who attend Eyona, and those who do not.

Although we have not been able prove or quantify these claims, the relationship they have with

primary schools will lead to referrals from teachers and principals which ultimately translates

into more business for Eyona. If a mutual partnership were to established between a primary

school and Eyona where each school was marketed to students and parents in the other, both

would benefit from the agreement while incurring little to no costs.

Eyona is a well known place in the localized area within Nyanga. This allows for an

extended support network when things go awry. An example of this happened in 2012 when,

for some reason, Eyona was without government subsidies for two consecutive months. This

forced salaries to be withheld for these months, causing a labor strike of their trusted

employees. Luckily, Eyona was able to call in their substitutes to take over temporarily until

the issue was resolved. If it weren’t for the community recognition and support of Eyona, the

situation could have ended with much worse results. This just goes to show why Nomonde

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feels obligated to give back to and support her community as much as possible. If a community

fundraising event were organized while simultaneously marketing the business, there is

potential for overwhelming support and success thanks to the great relationship Eyona has

with the community.

D. Concluding Remarks

A family of entrepreneurs has created a local institution in Nyanga and although the

team has identified a series of issues that need improving, the future of Eyona Educare Centre

is very promising. After conducting an in-‐depth analysis of the centre’s lack of funding,

insufficient resources, minimum to zero marketing, inconsistent revenue flow, very low

community awareness, incomplete bookkeeping system, insufficient infrastructure for future

growth, and an outdated, minimal business plan, the team is confident that with some changes,

the centre can be transformed into a sustainable venture so it can continue to serve the

community of Nyanga.

The educare centre is currently missing out on a profound 79% of the total relevant

market. With some operational, marketing, and infrastructure adjustments, the centre can

begin to capture more of the market share and compete more efficiently. The centre must

begin to move away from word-‐of-‐mouth marketing and employ a defined marketing strategy

that involves communicating the value and benefits that the children and parents will receive

once registered. By refocusing the funding strategy to target private companies and

fundraising events, revenue can more easily be predicted allowing for investments to made in

company infrastructure. Such improvements will allow for an increased marketing budget as

well as overall capacity to build the foundation for future growth. All these factors will not only

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lead to increased profits, Eyona will be able to give back to their community in ways that are

desperately needed such as job creation, education, and promoting township opportunities.

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Deliverables

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Deliverable 1: Create and Implement a bookkeeping system to allow for better decision making

1.1 Problem Statement

Accurate financial records are extremely important in any business to make good decisions.

A business needs to know how much money it makes to see if it can purchase new things or needs

to cut back on expenses. Eyona Educare’s lack of accurate financial records made it difficult to

make informed decisions on these kinds of matters. The basis of this issue is Nomonde’s lack of

background in bookkeeping, a very specific skillset that a lot of entrepreneurs aren’t

knowledgeable in.

Eyona is not able to accurately track the amount of revenue they have coming in or how

much they are spending. Nomonde is responsible for filling out the Statement for Income and

Expenditure each month for the government subsidies, but her lack of knowledge in bookkeeping

makes these records inaccurate and gives a misrepresentation of how the educare centre is doing.

She did not understand how to track the data and input the figures. She would estimate a lot of the

figures because she wouldn’t have the receipts to input. For example, Nomonde didn’t understand

how to read the bank statements, so she would just guess how much the bank was charging her.

Her figures for the parent fees did not add up in the notebook ledger she was keeping. She pays an

accountant to do the financial statements, but she was giving them the erroneous monthly income

statements which ended up messing up the financial statements. This caused the financial

statements to be thousands of rand off some months.

Without accurate books, the information cannot be used to help in decisions. She did not

ever really have an idea if she was losing or making money each month to know if she could spend

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more or needed to cut back. Knowing how much cash is in the business is crucial to making

purchasing decisions. She needs to how to keep proper books to assist in the decision making

process in the future.

1.2 Desired Result

The goal of the new bookkeeping system is for Nomonde to understand how to enter the

revenue and expenses into a simple ledger system in order to correctly fill out the government

subsidy forms and to know more about Eyona’s financial situation. The system is designed to be a

paper-‐based system since she doesn’t have a computer at the crèche. In the new system, Nomonde

will be able to track when the parents paid her and how much of the parent fees she actually

received. The expense tracker will break down the expenses by categories from the monthly

income statements from the government. It will be easier to fill out the forms at the end of the

month and they will be more accurate. Ideally this system will be simple yet efficient and will help

Nomonde to be more knowledgeable in her decisions based on how much money Eyona has.

1.3 Solution

The key to the bookkeeping system is keeping it simple enough that it could easily be done

on paper, but still gives Nomonde all the information she needs to fill out the government

Statement of Income and Expenditures for funding. These statements, if accurate, should give

her the information she needs to know about the company’s financial position in order for her

to make decisions such as whether or not she can purchase more school supplies. Since she has

an accountant, she does not need to be able to create her own financial statements, so she does

49

not need as sophisticated of a system. She needs to be able to track all of her expenses and her

revenues as they occur. There are three things she needs for the new system:

These items put together will be used to fill out the Statement of Income and Expenditure, the

document needed to get government subsidies. This form will also be useful in seeing if Eyona

was profitable or not for the month. Having accurately recorded data in this statement is

necessary to see if money is actually being made or lost.

Bank Statements

Since Nomonde doesn’t have to create her own financial statements, she will not have a

cash flow statement each month to look at to see how much money she has. She needs to know

this information in order to see if she can buy more things or if she needs to cut back on her

expenses. Instead of creating the statement, Nomonde can just use the bank statements to see

the balance of cash on hand. The bank statements are also needed to record the bank fee

expense on the Statement of Income and Expenditure. Previously Nomonde had just guessed

on bank charges because she didn’t understand how to read the bank statement. She needs to

• check cash balance • bank fee expense

bank statements

• records expenses when occured • classioies expenses into categories on Statement of Income and Expenditure

expense tracker

• records who pays money and when • shows how much money she is supposed to be receiving

parent fees tracker

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make sure that she records all the information accurately to ensure that she knows how much

she is spending on everything. Lastly the bank statements show how much money she gets

each month from the government subsidies. It is transferred directly into the bank account.

This is important information since the government subsidies constitute almost 80% of her

revenue.

Expense Tracker

The expense tracker gives Nomonde a way to record her expenses as she incurs them as

opposed to keeping all the receipts in a bag and then handing them over to the accountant at

the end of the year. He will have a much easier time if she gives him a sheet of her expenses,

Cash balance

Bank fees

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organized by date and category. She will also have an easier time in filling out the subsidy

form. This form breaks the expenses down by where she incurred the expense, the date of the

expense, and what kind of expense it was. She can utilize this information to see where she is

spending the most money and to see how her spending patterns vary across the months of the

year.

The receipts should be inputted as soon as they are received. Since it is a paper-‐based system,

Nomonde will have to add up the amount column at the end of each month to see the total

expenses. When she is filling in the Statement of Income and Expenditure, she can break out

each category (found under the description column), add up all those individual expenses and

then record it on the statement.

Parent Fees Tracker

Eyona’s other source of revenue besides government subsidies comes from parent fees.

The amount for government subsidies can be found on the bank statement, but Nomonde

needs a better method to track the parent fees than what she is currently using. Her notebook

ledger of parent fees can be a little overwhelming and hard to read. It also doesn’t include how

much the parents should be paying and how short in parent fees Eyona is each month. This

new system uses a monthly sheet that has all the children’s names listed out. It allows

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Nomonde to enter how much the children should pay and how much they actually do and the

specific date they pay it on. At the end of the month Nomonde can total up what she received in

parent fees, how much she should have received, and the difference in income that she lost for

the month. Since the number of children fluctuates, blank spots are open at the bottom to write

in the new children’s names as they register for the school.

Month Year Parent Fees Tracker

Student Name Amount Due

Date Received Amount Received

Akhanyile Nguma Bali Onesimo Bonkolo Imange Desemela Avethanda Desemela Liyabona Dyonta Iminathi Gumbi Mbalentle Gxalaba Linathi Gxalaba Siphelele Hewu Kamva Inathi Manikinana Kibido Gcina Koya Unako Luthuli Lukhanyo Luthuli Yolani Madliki Owam Makuluma Awonga Mali Aviwe Mayika Likhona Mayika Uzisiwe Mayimba Precious Mbali Gxalaba Mbemba Mbalentle Mbemba Ndalo Mbewu Asonele Vanto Nande Total

Difference

Amount Due-‐Amount Received

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The expense tracker gives Nomonde a way to see when the money comes in and how

much of it gets paid. She can use this information in deciding when is the best time to make

purchases based on when she has the most income or to see if it is a month where there is a

huge gap in what is supposed to be paid vs what is actually paid. If the difference is too big,

Nomonde can decide that she needs to really enforce those collections the next month.

1.4 Argumentation

Need for New System

• She was guessing on a lot of the categories for the Statement of Income and

Expenditures

• Did not have a good idea of how much she was spending

• Did not know how much money she should be receiving from the parents each month

• Could not tell profitability of Eyona each month

Expense Tracker

• Breaks down expenses into categories that can be directly transferred to subsidy form

• Knows how much total she is spending each month

• Allows her to see where she is spending her money to see where she can increase vs

needs to cut back

Parent Fees Tracker

• Can use this to directly input into subsidy form

• Shows the difference between how much is paid vs. how much needs to be paid

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• In months with high discrepancies in payment, she can send home letters asking the

parents to pay in order for her to run Eyona

1.5 Implementation

Nomonde needs to really understand how to use this system since financials are not her

strong suit. She wants to learn how to better keep track of her records so that her statements

are accurate. The key is going through it slowly and keeping it simple so that she understands

and wants to utilize the system.

Step 1: Go over issues with current system

Nomonde was pretty aware of the issues in her bookkeeping system. She agreed that

she needed a better method for tracking expenses. She also admitted that a lot of the expenses

were estimated on the Statement of Income and Expenditures. Once I explained the benefits of

having a system that tracked how much she was spending and earning, she was all about

learning how to use it.

Step 2: Create a system that would work for Nomonde

Usually bookkeeping systems are done on excel, but since there is no computer at

Eyona, and Nomonde spends the majority of her time there, Khomanani Consulting felt it

would be best to use a paper based system. We also kept it simple because she already has an

accountant to create all the annual financial statements. Nomonde just needed a system that

would allow her to track her expenses and parent fees so that she could easily fill out the

government subsidy forms. Those forms give her all the additional information she needs to

make basic management decisions such as where to spend more and where to cut back.

Step 3: Using the Expense Tracker

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Explained how when she received a receipt it would be recorded on the sheet

immediately. She would categorized the expense based on one of the categories from the

Statement of Income and Expenditure. We then explained that at the end of each month she

would add up each category’s expenses and input that information into the subsidy form. To

make sure she understood, she inputted a sample receipt.

Ex: Spar Supermarket, July 19th, R450.00

We then asked her to categorize a bunch of different receipts to make sure she understood

how to break them up into the categories on the government form. She also needed to

understand that sometimes a receipt would have to be broken up if the items fell into different

categories. For example at Shoprite there might be both food and stationary items on the

receipt. She would need to separate them out and put them as two separate entries in the

expense tracker.

Ex: Shoprite, July 4th, R325.00 total, R120.00 stationary, R205.00 food

At the end of the month she would total up all the expenses to get the total expenses for

the month. She should evaluate this number to see if it looks high or low and the reasoning for

these differences.

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Step 4: Using the Parent Fee Tracker

The names of the children were entered into a sheet along with a column for how much

the child is supposed to pay, when they pay, and what they actually pay. Nomonde would use

this to track when the revenue is coming in for the month to know when to make her

purchases. There are blank columns at the bottom for her to input additional students’ names.

She liked this system because it was more organized than the ledger and easier to follow how

much money she was getting each month. If the scholarship system is implemented, the

amount due would say R0.00 and the amount received would say R0.00. We went through

sample entries with her and explained the usefulness of tracking it by date and showing the

difference between expected and received revenue.

Step 5: Inputting the Information into the Statement of Income and Expenditures

Nomonde needs to fill out the government subsidy form each month to receive her

funding. She has to guess on a lot of the numbers and would spend a bunch of time at the end

of the month trying to figure it out. The new record keeping system of tracking revenues and

expenses makes it easy for her to fill this out at the end of the month. It should only take about

30-‐45 minutes to complete. She just needs to add up the parent fees for the month, input the

government subsidies amount taken from the bank statement, and then add up each category

of expenses on the expense tracker. Once all the information is inputted, she would take the

revenues in and subtract out the expenses to get her net profit for the month.

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1.6 Next Steps

With this new system Eyona should have an easier time keeping track of their financials. It

is a matter of making the record keeping a routine in order for it to be successful. There are

some steps to take to make sure the system runs smoothly:

1. Input the receipts in as soon as they are received

2. Make sure to get your bank statements sent every month so you can check the cash

balance and the bank fees

3. Utilize the parent fee tracker and starting in the month of August record parent fee

payments in the form

4. Take the information from the expense tracker and the parent fee tracker to fill out the

Statement of Income and Expenditures

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Deliverable 2: Design and Implement a focused fundraising program


Eyona currently depends on government subsidies for nearly 80% of their monthly

turnover. Adding to this issue is an inconsistency in government funding amounts from month

to month. Because the amount is partially based on the number of kids who attend each month,

these inconsistencies are inherent to receiving government funding.

This problem creates a foundation for the core problem this deliverable is addresses;

Eyona is currently unable to attract alternative sources of funding such as private companies,

larger corporations, or sponsorships, further increasing dependence on the inconsistent

government subsidies. Reasons for this include a lack of a structured business strategy plan to

present to funders and a system of reaching out to these alternative sources. There is

additional struggle in knowing the best way to communicate with them in order to receive the

desired and necessary funds.

2.2 Desired Result

Having a structured strategy plan to outline the key areas of the business, market, and

industry will provide a basis for Nomonde to attract alternative funding. Additionally, the list

of potential companies with contact information will make it quick and easy to know who to

reach out to, eliminating the complicated and time consuming process of research. All this will

add up to a more efficient fundraising program ultimately leading to increased company

sponsors and a decrease in reliance on inconsistent government subsidies. By having a more

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consistent monthly turnover, Eyona can better plan for future growth and further update their

facilities with items such as a perimeter fence, new employees, and higher marketing efforts.

2.3 Solution Business Plan (Refer to Appendix A)

Khomanani Consulting, alongside with Nomonde, has created a shortened business

plan, or strategy plan, as we will refer to it. The strategy plan is an overall summary of key

aspects of the business, how it operates, and who purchases the services. By addressing topics

such as these, as well as key risks and reasons for funds, Nomonde will gain a comprehensive

understanding of not only the business, but external factors impacting its success as well.

Being able to demonstrate her detailed understanding of the business and the context in which

it operates will improve chances for external funding. A full length copy of the strategy plan

can be found in Appendix A at the end of this document.

List of potential Funders (Refer to Appendix B)

To improve efficiency and simplicity when reaching out to funders, Khomanani

Consulting has compiled a spreadsheet consisting of necessary information about sources of

funding. For each source, a contact name, number, and email is entered, as well as whether or

not the option seems viable and any additional notes regarding the specific entry. The list also

keeps track of the progress that has been made for each entry (such as not contacted yet,

contacted but no reply, or spoke to head NPO officer, etc…). A sample of the list can be found

following the strategy plan Appendix B.

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Scholarship System

To attract funders and take stress off of the financial system in place, a scholarship

system will allow for 10 children to attend the centre for free. Either individuals or companies

that wish to support the centre and education in the area will sponsor the scholarships.

The parents will have to submit certain documents that will supplement the scholarship form in an effort to give the scholarships to children with the most need.

!

Scholarship Application Strictly Confidential Child Information Child’s First Name: Surname: Date of Birth: / / Gender: M / F Age: Grade: Home Address:

Documents Required

Parent (Guardian) Proof of Employment Reference Letter 1 Reference Letter 2

Please Explain why your child would benefit from receiving the Eyona Scholarship.

Parent (Guardian) Signature: Date: / / Principal Signature: Date: / /

Office Use Only

1. Admission Application Completed 3. Scholarship Application Completed 2. Admission Application Accepted 4. Scholarship Application Approved

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2.4 Argumentation Strategy Plan

● Able to obtain alternative sources of funding

● Provides Nomonde with a better understanding of business context

● Foundation for a full length business plan for future growth

● Structurally map out all aspects of the business, internal and external

List of Funders

● Easily and efficiently find information for contacting funding sources

● Visually show progress in the contacting process

● Template for entering future prospects

● Allows for more than one employee to contact entries due to sharing of information

Scholarship System

● Allow children in the community who cannot afford to attend the centre to be

sponsored into the ECD

● Benefit the community through giving children with a scholarship a strong foundation

in hopes of better preparing the child for future success.

● Build the centre through partnering with outside sponsors and companies.

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2.5 Implementation

In order to implement the new fundraising program for Eyona, Khomanani consulting

went through a number of steps along side Nomonde in order to have the most sustainable

impact possible. Because the strategy plan and list of funders are complementary to each

other, steps for implementation are combined into a single section, rather than two individual

processes. These steps are outlined below.

Step 1: Identify and explain the value of a business strategy plan with specific prospects.

Before even starting to compile a strategy plan, the reasoning behind doing so was first

explained to Nomonde. Together, we came to the realization that by having and understanding

the strategy plan, Nomonde will be able to attract alternative sources of funding and decrease

Eyona's dependence on government subsidies. Additionally, we showed her the value that lies

within having a focused and organized prospect list to reach out to. This was a achieved by

comparing the new process to her old one and contrasting the major differences.

Step 2: Gather necessary information from Nomonde for strategy plan.

Once Nomonde was on board with the writing of the strategy plan, we then had to

gather the necessary information from Nomonde for certain sections of the plan. Khomanani

Consulting spent about an hour walking through each section of the plan and taking notes on

what was said. This ensured that the information within the plan is as accurate as possible as it

is “straight from the source.” Certain sections were discussed more extensively such as the

business concept, financial needs, and competitors. Other sections such as market and industry

analysis were more brief due to a lack of knowledge.

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Step 3: Compile notes into formal plan.

After we had the required information from Nomonde, Khomanani Consulting compiled

it into a formal strategy plan. The plan is not a full length business pan, as this would not fit the

context of the business and its current situation and goals. Instead it is a summarized business

plan, known as a strategy plan. All the sections of a normal business plan are addressed, just

briefly and concisely, instead of providing in depth analysis. Certain sections contain

information that is not relative to the way Nomonde runs her business. These sections, such as

industry and market analysis, are still addressed in the plan as potential sponsors will like the

information.

Step 4: Walk through plan with Nomonde

Once compiled, the plan needed to be thoroughly explained to Nomonde as she is the

one who will ultimately be presenting it to funders. We did this by showing her the written out

sections, explaining their meaning and importance to the overall plan, and asking for any

questions she may have. It is crucial that Nomonde understand each section to be able to look

at the business as a whole, instead of with a narrow focus.

Step 5: Relate the business plan to list of funders and walk through the process

The plan doesn’t provide any benefit if it cannot be presented to funders. Khomanani

Consulting spent time walking through the process of contacting the entries on the list and

how to update the list accordingly. We also showed how to make any additional changes to the

list format should Nomonde want to update it in the future.

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Scholarship System Implementation of the scholarship system will completed by the following steps:

1. Once parents have enrolled the children, they will have the opportunity to fill out the

scholarship application.

2. The parents must submit some type of proof of employment.

3. The parents must submit two reference letters that explain why the child should

receive the scholarship. These letters should be from non-‐family.

4. After all documents and the form is submitted, the principal will process the

information and compare it to the other applicants.

5. Once the all forms are entered and processed, the parents will receive a notification if

the child has or has not received the scholarship.

2.6 Next Steps

To continue the success of the deliverable after our consulting engagement, the strategy

plan and list of funders must continuously be updated as the business changes. For example, as

the business grows it will have different reasons for needing funding, or different things to

spend the funds on. This will most likely change the amount needed which will change the

targeting strategy used when finding sources. As the business’s needs change, the list and plan

should change along with it.

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Deliverable 3: Create marketing tools designed to increase awareness


The marketing and sales goals of Eyona Educare Centre currently consist of the notion

“whatever happens, happens.” As a result of no market segmentation, no sales materials for

either parents or companies, and no clear branding, the centre is suffering from low awareness

and low, inconsistent cash flow. The centre is serving primarily parents and children from the

immediate surrounding area of Nyanga, but our analysis based on government census data,

centre records, and competitor research shows that the centre is only occupying

approximately 2% of the relevant market. Taking buying power into account, the lack of

market share points directly toward the lacking marketing system in place. Of the customers

being served, no way to identify the reason for purchase currently exists. Identifying the

buying behavior and characteristics of its market will allow the centre to employ an effective

marketing strategy, which will increase awareness and market share.

3.2 Desired Result

A new marketing strategy with marketing tools for Eyona Educare Centre will provide

better market segmentation and understanding of segments and behaviors, an increase in

market awareness of the business and ultimately rising sales and growth in market share. The

strategy will serve as a guiding light for Nomonde, which she can use to better care for the

children she serves now and those that will receive the services of the centre in the future.

Business aside, the crèche really is about providing for severely neglected children who need a

strong foundation to break the cycle of poverty in Nyanga. The marketing plan will serve as a

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tangible incarnation of Nomonde’s passion for the children and families of the Nyanga

township and surrounding areas.

The marketing tools will allow for the centre to establish a beginning foundation for

moving away from government support. Government subsidies have and continue to be a

revenue stream for the centre, but economic turbulence and instability have recently caused

reason for concern and the crèche is now looking to move out from dependence of government

support. Government subsidies are only supposed to make up for the gap in revenue where

parents cannot afford to pay the required attendance fees, however, these subsidies are

frequently inconsistent and have regulations that are constantly changing. To avoid trying to

always maintain these regulations, a better targeted customer segment is needed in order to

not be dependent on subsidies. Once the tools are set in place, the business will be able to

create specific marketing programs for specific targets.

3.3 Solution The new marketing tool set is created on three pillars:

1. Clear, defined Market Segmentation Profile Map

2. Identity Package with new logo, letterhead formatted for parents and private

companies, and an advertisement flyer to spread awareness throughout the local area.

3. New admission application form with marketing survey question section created to

determine source of brand awareness from new clients and identify service

enhancement opportunities

These tools all used together will enable the centre to find out whom the market is they can

best serve, where that market is, and how to make that market know about the centre.

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Market Segmentation Profile Map (Refer to Appendix C) The profile map consists of five profile categories and nine levels of criteria. The five profiles

are:

1. Castle

2. Professional

3. Government

4. Private Company

5. Social Profit Organization

The nine criteria are:

1. Purchase Frequency

2. Geographic Location

3. Age

4. Occupation Location

5. Purchase Reason

6. Purchase Psychology

7. Age of Kids

8. Income

9. Payment Type

The profile map creates five clear divisions of market segments within the relevant market

for the centre to target and tailor its marketing efforts toward. The map lays out specific

characteristics of each group creating insight and awareness of how, why, and when each

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segment purchases. Although a significant change from the current marketing strategy in

place, the profile map will enable the centre to make informed decisions when creating its

marketing materials and campaigns.

With set profiles in place, the centre can plan marketing campaigns that cater to each

profile individually. For the Castle and Professional profiles, a campaign might look like

posting flyers around the neighborhood and local hot spots as well as talking to people at

markets and primary schools. A campaign for private companies and Social Profit

Organizations would differ dramatically though. This effort would have a more professional /

corporate method with drafted proposals for grants and support. A partnership could also be

discussed with these more wealthy profiles. The point is that the campaigns can be different,

but equally effective in bringing kids and revenue into the business.

Identity Package – New Logo

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The original EEC logo did not serve as a branding element for the business. It was

something that existed on only a few forms for no reason. The new logo aims to serve as an

incredible branding element for the company and as a business identifier for potential funding

companies. The logo consists of the following features:

1. The addition of “& Nursery” to the official name

2. Three silhouettes of children holding hands

3. The name of the company in a font and colors consistent with the spirit and culture of

the centre,

4. The company slogan that communicates the nature and future of Eyona Educare Centre.

Identity Package – Letterhead (Refer to Appendix D)

The letterhead continues with creating a consist brand for the business. This identity piece is a

very important element when contacting parents, organizations, or potential funders. It gives

the business a sense of professionalism and creates an atmosphere of legitimacy.

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Identity Package – Advertisement Flyer

Eyona Educare & Nursery Centre Monday - Friday 6:30 - 18:30 !

CLOSED ON PUBLIC HOLIDAYS !Now Accepting Applications!! !

Ages 0 - 3 Ages 4 - 5 AfterCare Available *Ask for Details ! ! 3RD AVENUE | EKUNGENEI STREET | ZWELITSHA | NYANGA | 7755 !

Call 083-595-8859 or Email [email protected] for more information!

HELPING TO RAISE SOUTH AFRICA’S CHILDREN

!

ESTABLISHED

1994

20 YEARS OLD

EMOTIONAL

PHYSICAL

INTELLECTUAL

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The flyer contains many important elements:

Ø New logo

Ø History of company establishment

Ø 3 pillars of the business objective

Ø Hours of operation

Ø Call to action – encouraging people to apply for admission

Ø Ages served and services offered

Ø Location

Ø Contact Information

Ø Emotional benefit that draws the community in

This identity piece can be distributed at local stores, cash stores, petrol stations, primary

schools, churches, or simply passed out to parents who have kids already attending. By

distributing the flyes to the parents, they can they use them when they refer other parents to

the centre. The main objective with the flyer to is to increase awareness through something

tangible that others can see and be attracted to the centre through.

Admission Application Form (Refer to Appendix E) Marketing Questions Section on Form

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The new admission application form serves two purposes. The first purpose is that it

reorganized the old admission form into a simplified version that allowed applicants and

centre employees to quickly search and identify information. The second purpose is to identify

the source of awareness on behalf of the new customer. The new form includes two questions

at the bottom aimed at pin-‐pointing exactly where the knowledge of the business originated

from and to also find out if the client had previously purchased services from direct or indirect

competitors. The second question also serves to identify potential opportunities for

improvement by looking at service complaints or problems clients experienced with

competitors.

Based on the responses received, the centre can know how people are hearing about

the business, which can then be used to focus marketing efforts. These efforts might look like

putting more flyers up around a certain neighborhood if people seem to be coming more from

that area. If people are finding out more about the company just by walking past the crèche,

the company could place a sign outside saying something like “Come experience Eyona

Educare & Nursery Centre for Yourself!” Whatever the responses indicate, follow that path.

3.4 Argument Market Segmentation:

• Differentiate attractive and unattractive segments

• Improve marketing strategy to target more attractive segments

• Improve understanding of specific customer needs

• Portray a solution to the specific needs

• Increase awareness and attractiveness of business

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Identity Package geared towards parents and private funders

• Create brand identity and consistency throughout the business

• Improve awareness in the marketplace

• Improve aesthetics of company marketing efforts to increase perceived quality

• Generate interest by incorporating emotional benefit – “Raising South Africa’s Children”

• Attract investors through increased networking abilities

Awareness Section on Application:

• Understand where customers most often learn of Eyona

• Gear future efforts toward these outlets

• More efficient and effective targeting approach

• Learn customer buying behavior

• Improve ability to network business to local parents

• Identify opportunity for service enhancement

3.5 Implementation Market Segmentation The market segmentation profile map is something very new for the business so it will

take some time to get used to. The map will be the most useful when the crèche begins taking

in more and more students. Using the new admission forms, the crèche will be able to see what

profiles are most represented and where to focus its efforts on getting kids enrolled. On the

other side of the segmentation map, a guide is provided on which companies to seek funding

from. To take advantage of the criteria presented, the crèche should follow these steps:

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By using the segmentation map as a guide to follow when searching for potential funders,

valuable time can be saved by not contacting companies that would have a low percentage of

success. As the crèche grows in capacity and sponsors, the profiles may need to be adjusted

accordingly.

Identity Package – New Logo The new logo was created as a total team effort with the entrepreneur and consulting

members. The specifics of the logo were created after the team and entrepreneur discussed the

original logo, the pros and cons of the logo, and what the entrepreneur wanted to communicate

with the logo. After going back and forth a few times, a final logo design was settled on. The

logo was crafted in Photoshop and presented to the Entrepreneur and she was really happy

with the result. With CCI renovating the centre, the logo was finished in time to be painted onto

the building. The logo can be expected to be shown on the left and right side of the front of the

1. • Determine the prooile type the company or organization is. • Does it oit the prooiles in the map or does a new prooile need to be created?

2. •  If it oits a prooile, does it meet the required critera? •  If no, search for a similar company that does meet the criteria

3. •  If yes, draft letter / proposal with ofoicial logo for funding or other purposes.

• Be conoident that this correspondence is worth the time

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building. The logo will also be put to use on official documents such as admission forms,

scholarship forms, and marketing materials.

Identity Package – Letterhead The letterhead was a simple process to implement. After the team and entrepreneur

created a design for the letterhead using the new logo, it was ready to be put into place

whenever official letters to parents or companies needed to be written. In order to implement

the letterhead, the entrepreneur will need to take the design to a printer or personally print it

out onto a paper and either write directly on the letter or use a computer and type the content

onto it.

Identity Package – Advertisement Flyer The flyer will need to be printed out either at a personal printer or at a company print

shop. Once printed, it will need to be distributed through either several locations around

Nyanga, given directly to parents to share with neighbors, or a combination of the two. As the

crèche grows, the flyer will need to be adjusted by content and design. It is a very simple

document to change and can be done through either Microsoft Word or a software program

called Pages on Macintosh operating systems.

Admission Form with Marketing Questions

Implementation of the new admission form will begin by replacing all of the old forms

with the new form. This will need to be accomplished at the very beginning to make sure old

forms do not get used by mistake. With the new marketing questions in place, the

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entrepreneur must keep track of the responses. The simplest way to do this is to separate the

admission forms by month. At the end of the month, count up the circled choices and write

down the totals on a sheet titled “(Month) Admission Answers.” The totals will give a picture of

what is most driving people to the centre. If it is friends/family, then word of mouth is

currently the biggest source of marketing the centre has. If this is the case, the centre can do

things like send appreciation cards to the parents, have a parent appreciation day, or

something that shows the parents how much the centre appreciates their kids. This will build

loyalty among the parents to the business and will result in more word of mouth marketing

and referrals. The same process goes for if the biggest source of awareness comes from flyers

or walking by. Whatever the source is, use it to the company’s advantage. Try to enhance that

already dominant source.

3.6 Next Steps

As the crèche grows in capacity and sponsors, it is important to remember that

awareness is key. The flyer must continue to be updated every three or six months. Actively

seek out where the kids are coming from. When the crèche grows, it can start to employ more

sophisticated measures to track where its kids are coming from. It can use surveys to measure

how happy and satisfied the parents are with the crèche. This sort of measurement will not be

needed however until the crèche reaches at least 80 children. Until then, the crèche must

remain focused on generating as much awareness as it can.

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Deliverable 4: Create and Implement a process to achieve and maintain government approval and accreditation for 60 children.


The educare centre has 45 children enrolled, but only has an official capacity approval for

30 children. The current capacity limit is a large source of problems for the crèche. With the

current limit, the crèche is unable to receive subsidies for its current number of students,

unable to apply for the correct funding, and is ultimately unable to justify serving more

children. While these are big problems for the crèche, they are simply the result of not having a

set process in place to go about achieving accreditation and approval for an increased amount

of students.

The crèche has been operating without a set process in place for the twenty years it has

been in business. It has operated day to day with no general direction except to provide for the

kids of the surrounding area. With no process in place, the crèche is simply at the mercy of the

governing departments who although are there to help, do not actively try to improve each of

the ECDs under its jurisdiction.

4.2 Desired Result

A process for applying for and achieving government approval and accreditation will

allow the crèche to not only justify serving 60 children, but it will allow the crèche to continue

to increase its capacity as the business grows. The process will provide a set system for the

entrepreneur to follow step by step in order to contact the government, submit the correct

forms, receive accreditation and capacity increases, and ultimately be able to handle serving

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more children. This process will effectively double the capacity of the centre from 30 to 60

children once completed.

4.3 Solution

The South African Government and Social Development Department has a system set in

place for registration of ECDs, however, the process is at times confusing and can be

frustrating to the principals of the small crèches. The system can be seen in Appendix F. The

Government also has a checklist of requirements in place for inspectors to come out and test

the centre with. This list can be found in Appendix G. Although these systems are in place,

they are not the easiest to follow along.

The make the process easier, Khomanani Consulting will implement a systematic

process outlining the steps that need to be taken in order to get the capacity reading for the

creche updated. This process can be followed every time the crèche seeks to increase capacity

or obtain new legal documents such as zoning and health certificates. The process is visually

displayed in a flowchart that includes contact information and addresses for important

resources that will be of use for Nomonde when going through the process. It is designed in a

way that no matter what step Nomonde or the crèche may be in, the next step will be easy to

identify and move forward with. The process has been color coded to reflect the progress

Eyona has made in the process toward achieving 60 children capacity. The color key of red,

yellow, and green indicate the progress that has been made for each step in the process. Green

indicates the step has been completed, yellow shows that the step is in progress but not yet

completed, while red indicates the step has not yet been started. An explanation of each step

can be found below.

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Step 1: Current situation analysis

Step one requires Nomonde to step back and look at her current situation in order to

better understand her current needs. By doing so, and then discussing with a government

official what other updates may be needed, she ensures that her desired goals for capacity are

attainable and acceptable.

Step 2: Complete facility improvements

After the desires and capabilities for increased capacity are clearly understood, it is

necessary to complete improvements to the facilities. Such improvements could include, but

are not limited to roofing, toilets, kitchen appliances and interior walls. It must be noted that

while some improvements may not directly affect the government capacity reading, they are

still necessary to complete so that the creche can support an increased capacity.

Step 3: Obtain required forms/documents

The necessary documents that are needed for this specific situation are a zoning

certificate, health certificate, and a fire certificate. The flowchart provides information of what

government office provides each form should new ones need to be acquired. Nomonde already

has these documents so it should not be necessary to obtain new ones.

Step 4: Submit forms to Department of Social Development for review

Once these three documents are located at Eyona and filled out, they must be submitted

to the department of Social Development (DSD) for review. This is the crucial step in the

process as the DSD is ultimately responsible for sending an official out to the creche to have

the capacity reading re-‐evaluated. This step is currently colored red as it has not been started

yet. We expect progress to be made once the facility improvements are completed.

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Step 5: Follow up with DSD

Once the documents are submitted, it is crucial that Nomonde follow up with emails,

phone calls, and even visits to the Western Cape office of Department of Social Development. It

is not uncommon for things to get lost in the extensive process, so following up with the office

is a good way to prevent things from falling through the cracks.

4.4 Argumentation

Ø Have a starting place to begin the accreditation, approval, and capacity process

Ø Better understand how government regulations work and how to deal with them as

they change

Ø Able to accomplish future approval in a shorter time period

Ø Identify missing pieces if already in the middle of the process

4.5 Implementation

The South African government requires very specific regulations be met throughout the

entire process of increasing capacity at ECD’s. This is where the implementation process

began. After identifying the correct government official within social development to talk to, a

meeting was set up to ask any questions. This appointment let the team meet Novulo, the

social development officer in charge of the Nyanga area. The conversation between Novulo and

the team provided direction on what the process was, the regulations involved, the forms

needed from the entrepreneur, and what road to go down next. Because the entrepreneur

turned in the funding application the last day it was open, the team and entrepreneur were

unable to move forward and had to wait for the government to respond. This is where the

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process comes in to place in the current situation, but can be utilized in full the next time the

business is trying to increase capacity.

Although Nomonde is aware of some of the steps in the lengthy process, she does not

know specific forms to be completed or to whom they should be submitted. When walking her

through the flowchart of the steps in the process, we showed her that each step includes what

forms are required before moving onto the next step and where they should go once

completed. She was also made aware of the contact information available for useful offices and

employees should she require additional consulting throughout the process.

4.6 Next Steps:

The next step in the process is to keep up to date with government regulations

concerning ECDs and capacity approval. By doing so, the process will maintain its usefulness. It

is very important that the entrepreneur stays proactive and not reactive. Government

regulations change very frequently and it is the entrepreneurs responsibility to know what the

changes are.

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Appendices

84

SEE Model Appendix Cash Flow Statement

85

Income Statement

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Appendix A: Business Strategy Plan

Business Strategy Plan

Eyona Educare & Nursery Centre Nomonde Vusi-‐Acting Principal

Zwelitsha, Nyanga, South Africa

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Business Concept

Eyona Educare & Nursery Centre is an early childhood development (ECD) center, or creche that is registered as an official non-‐profit organisation (NPO) with the Department of Social Development. Located in the heart of the Nyanga township in the Western Cape Province of South Africa, Eyona’s core business concept revolves completely around the community and the children enrolled. Services are provided for children ages 0-‐6 whose parents need a safe and stimulating place for their children to spend the day.The mission of Eyona is to provide life skills, numeracy, and literacy to children ages 3-‐5. For children ages 0-‐3, the mission is to help the children develop physically, mentally, and emotionally through compassion, learning, and socialization.

The creche offers two classes, one for children 0-‐3 1⁄2 years old and another for children 4-‐5 years old. Eyona works on intellectual and social development for the children to provide a safe and nurturing environment for them, while also preparing them for entry into primary school. Eyona follows a curriculum from Sector Education and Training Authorities (SETA) which highly resembles the outline of grade R curriculum. This has led to positive reviews from the local primary school teachers that Eyona students are more prepared than the average entry level student. A good reputation has helped Eyona retain clients, develop family loyalty, and receive referrals. The centre has been very good about following the curriculum and staying true to it’s purpose.

In addition to the school services, Eyona offers aftercare services. From 16:30-‐18:30 the children can stay at the creche until a family member can pick them up. This allows for parents who have long workdays to enroll their children at Eyona. Young children from the local primary schools are also allowed to enroll in after school services where they can receive assistance with their homework. In total, Eyona Educare Centre has primary services: 0-‐3 1⁄2 years old classes, 4-‐5 years old classes, and aftercare services.

0 – 3 1⁄2 yrs old

R200 per Month

4-5 yrs old

R130 per Month

Aftercare age 0-Grade 1



Due to the low income of families in the surrounding area, Eyona offers a scholarship opportunity for children who meet the requirements. The scholarship provides an opportunity for disadvantaged township children to have an opportunity to set a positive foundation for the rest of their life. This unique aspect of Eyona not only sets them apart from the competition, but also incentivises alternative funding for future growth while simultaneously benefiting the community.

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ECD Industry

Eyona Educare & Nursery Centre was one of the first creches established in the Nyanga area. At the time of establishment there were few competitors. Over the past 20 years, the industry has become saturated since many have realized the ease of entry and the opportunity for success within the industry. Now there are six other educare centers in the immediate surrounding area. Reasons for this include an increasing demand for educare centers as more parents are becoming employed, as well as low barriers to entry for the industry. The industry still possess large potential for growth however. As of 2000, there were 23,482 ECD centres in South Africa. Of the total population of kids ages 0-‐6, only 16% are currently enrolled in services offered by ECD centres such as Eyona. This largely untapped market makes the ECD industry relatively attractive despite the many competitors and low barriers to entry.

Market Analysis

Nyanga currently has 1.7 children ages 0-‐7 per household, with 15,993 households in the area (Nyanga 2011 Census). With unemployment reaching nearly 45%, the ability to purchase becomes a major factor in determining relevant market size. For the purpose of analysis, the relevant market is defined as households with children ranging from ages 0-‐7, with turnover greater than R3,200 per month, and lives within the Nyanga township including the areas Black City, KTC Informal, New Crossroads, and Nyanga SP.

The parents of the kids who are enrolled at Eyona are mostly unemployed students still in secondary school. Some parents are completely unemployed and out of school, while a small percentage are working jobs within the city or working as farmers in rural areas. A common trait shared between all the customers of Eyona are low income parents within the local area of the Nyanga township. Because of the lack of resources available to this community, the main reason for attending Eyona is simply the location and convenience it provides for families.

One of the core attributes that Eyona possesses is its reputation within the community. This is extremely important for Eyona due to the context in which the business is operated and the buying behavior of the target market. It receives good word of mouth referrals due to the success of their former students, which is the main source of information for potential customers. There is a history of families having all the siblings and relatives going to the same creche, so a positive impact with one student could lead to 10+ students in the future. These relationships serve to be very valuable when managed correctly.

Competition

There are many direct competitors within the immediate location of Eyona. However, there is little to no differentiation between any of these creches. The two main factors influencing buying decisions for ECD services are price and location. There is intense price competition for ECD’s which creates an opportunity for Eyona to differentiate from the competition in many other ways. Eyona capitalizes on this opportunity by providing meals for its students. Many ECD’s do not provide meals for the children, which creates incentive for parents to enroll in Eyona rather than the competition. In addition, Eyona employs a certified level 5 staff member (Nomnde, principal) with the National Diploma for Early Childhood

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Development. In 2000, only 12% of all educators at ECDs in South Africa were qualified for their work, and even less at such a high level.

Economics

As an NPO, Eyona’s current monthly turnover consists of approximately 80% government subsidies and 20% parent enrollment fees. However, as improvements to facilities are designed and implemented, the funding structure will shift from this heavy government reliance to more private funding, as well as increased parent fees due to higher child enrollment rates. Registration as a public benefit organisation (PBO) will allow for companies who invest in Eyona to receive a tax benefit on the donation further incentivising private company investment and funding. This will further decrease reliance on government subsidies therefore increasing the consistency and stability of the current economic model of the business.

Parent fees are divided into two pricing categories based on age of the child; R130 for 4-‐5 year-‐olds, and R200 for 0-‐3 year-‐olds. Additionally, Eyona offers a scholarship opportunity for students who meet the necessary requirements. For eligibility, students must fill out the scholarship application outlining reasons for applying, as well as maintain at least 90% attendance for the month. If attendance rates drop below 90%, the scholarship is rejected and will be awarded to the next eligible applicant on the waiting list.

Marketing

Most of Eyona Educare Centre’s marketing efforts are focused on word of mouth referrals. The centre has been operating with a small town mindset where everybody knows their neighbor. However, Eyona has recently started to distribute promotional flyers around the community at churches and markets in an attempt to increase awareness. The flyers are another great way that Eyona can differentiate from the competition and increase customer awareness of their services.

The centre is currently positioned as an early life educational and social development child care centre for children up to Grade R providing a safe place for parents to send their children during the day. While this informal way of being positioned in the market has worked for the centre over the years, there is many opportunities to capture a larger market share due to a lack of marketing for any ECD within the area. By altering the approach toward parents who appreciate or desire a great kick start to their child’s education, the centre can begin to focus in on not only a more specific market segment, but a potentially more profitable segment. By pushing even further, the centre could come to be recognized as a superior educare centre known for its prestigious curriculum where only the best primary schools recruit from. This segment would be more profitable due to the fact that the centre’s current paying clients are inconsistent with their payments. By targeting parents who have a high perception value of the services provided, payments will be more consistent and the parents will be more likely to comply with the centre’s policies. If the centre could be moved to the premium creche sector, a whole new range of possibilities will open up.

Management

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The current management situation at Eyona is a very strong attribute. The acting owner and principal, Nomonde, has worked in the business for 8 years and currently holds a level 5 certification in The National Diploma for Early Childhood Development. Her two employees have been employed at Eyona for about the same amount of time and are an excellent asset to the company. Nomonde provides great management along with leadership qualities to ensure the continued success of the business as well as maintaining positive relationships with her employees.

By having such a reliable and caring set of employees operating the creche, Eyona is able to continuously maintain a high standard of ECD services for their customers. Many competitors do not have reliable employees due to a lack of proper training and low pay due to inconsistent funds. This can lead to poor services and even less parent fees received. Eyona’s experienced and dedicated staff provide quality services which allow Eyona to regularly satisfy their customers through a sense of trust when parents enroll their child.

Operations

Eyona Educare Centre operates year round Monday through Friday, excluding holidays. The operating hours are from 6:30-‐18:30. The daily schedule for both age groups can be found on the following page.

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The above is a visual representing the daily curriculum used by Eyona. Eyona follows a curriculum from Sector Education and Training Authorities (SETA), which highly resembles the outline of grade R curriculum.

Key Risks

One major risk facing Eyona and many other ECD’s is the large percentage of turnover being provided by the government in the form of subsidies. This dependence means that Eyona has less control over their turnover amounts than a traditional business does. Relating to this, another risk encountered is that the policies describing the the criteria followed to determine funding are extremely ambiguous and hard to access, creating a lack of information for many ECD’s, including Eyona.

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Another potential risk that Eyona faces is the extremely low income of the enrolled children’s families. Although they provide quality services, many potential customers cannot pay prices high enough to support the sustainability of the business. Simply lowering the prices to attract more customers seems, at times, the only option for Eyona.

Financial Needs

When funded, Eyona’s top priority purchases include office/school supplies (desks, chairs, copier/printer), kitchen appliances (fridge, microwave, stove), computers for Nomonde as well the children, and a fence around the perimeter of the facility. In addition, Eyona needs funds to hire a new employee to support a raised capacity reading and future growth of the business. These improvements will allow Eyona to grow substantially, as well as provide higher quality services to ultimately attract more paying customers.

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Appendix B: Potential Funders Database

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Appendix C: Market Segmentation Profile Map

Criteria Castle Professional Government Private0Company

Social0Profit0Organization

Purchase0Frequency Monthly Monthly Quarterly Yearly Monthly./.Yearly

Geographic0Location Within.Nyanga

Within./.Around.

NyangaState

International./.

South.Africa

International./.

South.Africa

Age 18<65 21<45 N/A 5+ All.Ages

Occupation0Location Within.Nyanga

Within./.Outside.

Nyanga

Education.and.

Social.

Development.

Sector

N/A

Community.

Development.and.

Support.Based

Purchase0Reason

Want.pre<

primary.

education./.

babysitting

Want.pre<

primary.

education./.

babysitting

Support.Local.

Education

Support.Local.

and.International.

education.efforts.

/.tax.benefit./.

BBEEE.rating

Support.Local.and.

International.

Education.efforts./.

BBEEE.Rating

Purchase0Psychology

On.Reputation.

/.Referral

Research.first,.

Weigh.

alternatives,.

Make.purchase

On.required.

regulations.met.

and.inspections.

passed

Through.

research/.

committee.

approval

Through.research.

/.application

Age0of0Kids 0<5./.Grade.R.

–.Grade.1

0<5./.Grade.R.–.

Grade.10<4 N/A N/A

Income R2500.–.

R3200R3200.+ N/A R1.Million N/A

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Appendix D: Letterhead

Emotional | Physical | Intellectual

3rd Avenue, Ekungenei Street Zwelitsha, Nyanga 7755

17 July 2014 Title Position Street City, Country Dear Name, Sincerely, Nomonde Vusi Principal Eyona Educare & Nursery Centre 083-595-8859

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Appendix E: Admission Application Form

Admission Application Strictly Confidential Child Information Child’s First Name: Surname: Date of Birth: / / Gender: M / F Age: Grade: Home Address:

Parent (Guardian) Information

Mother’s (Guardian) Name: Surname: Occupation: Work Address: Cell No: Tel (H): (W): Father’s (Guardian) Name: Surname: Occupation: Work Address: Cell No: Tel (H): (W):

Other Information

Home Language(s): No. of children (dependent) in family: Marital Status of Parents: Religion: Names of Brothers/Sisters of Pre-School Age: , , Person(s) responsible for bringing / pick up of child:

(state relationship to child / If not a family member, give address and contact number) Special Concerns (Health, Allergies, Special Food, Handicaps, etc):

** Immunization Records Received (Date):

Parent (Guardian) Signature: Date: / / Principal Signature: Date: / / How did you hear about Eyona Educare & Nursery Centre? (Circle One): Friend/Family | Flyer | Walk-By Other: Has the child been enrolled previously at a different Educare / Creche / Pre-Primary facility? Yes / No If Yes: Name of facility Reason for leaving:

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Appendix F: Official Government Flow Chart for ECD Registration

ECD POLICY SEPTEMBER 2013

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ANNEXURE 1: SDECD ECD REGISTRATION APPLICATION PROCESS FLOW

Applicant approaches SDECD ONE STOP ECD REGISTRATION SERVICE POINT

EXPECTED TIMELINES

ZoningDeparturesConsent useBuilding plan approval

YES NO Apply for Building regulation applicable to prefabricated structures & shipping containers

In terms of NBR compliance, the prefabricated structure or shipping containers requires a proper assessment through means of a rational design process during the planning phase.

The rational design must indicate Part B: Structural Design and Part T: Fire Protection including Thermal Performance / Protection.

Food preparation

Number of children allowed to be accommodated

Fire clearance certificate ito National Building Regulations and Standards ActChange of occupancy,e.g.using house or garage as creche may require plan submission and approvalAlternative means of escape required when the total population (teaches and children) of the creche exceeds 25 persons

Fully compliant with all requirements

Only 60% compliance with ECD norms and standards

Approximately 3 months

Registration Certificate issued

Conditional Registration Certificate issued

4DEPARTMENT OF SOCIAL DEVELOPMENT - PROVINCIAL GOVERNMENT

NATURE OF THE APPLICATION IS DETERMINED & COURSE OF ACTION IS

DISCUSSED

4Registration

Assessment of the application in terms of the National ECD Norms and Standards

PROCESS PHASE

1PLANNING & BUILDING DEVELOPMENT MANAGEMENT DEPARTMENT (LAND USE MANAGEMENT ISSUES)

2HEALTH DEPARTMENT

3FIRE & RESCUE SERVICES

2Health Clearance Certificate

3Fire Clearance Cerificate

1Land Use Management -

Land use rights in place?

NO Apply for registration

NO Apply for

SDECD ONE STOP ECD REGISTRATION SERVICE APPLICATION PROCESS FLOW

For a standard process approximately 6 months is required:

When:1. Incomplete application is submitted (in cases where the applicant submits directly to the PBDM).2. Objections are received3. An appeal be submittedThe process may be longer

Approximately 3 weeks

Approximately 3 weeks

SDECD ECD REGISTRATION SERVICES

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Appendix G: EDC Government Regulations for Ages 0-‐6 & Aftercare ANNEXURE 2: STANDARD HEALTH REQUIREMENTS

INFANTS SECTION (0-‐24 months)

1 An unobstructed indoor play area of at least 1.5m2 per child must be provided.

2 An outdoor play area of at least 2m2 per child must be provided. If no outdoor space is available,(permission MUST be sought from Council to use a nearest play park/Public Open Space where children can play under close supervision of an adult)

3 The indoor and outdoor play areas must be separated from the children’s (2-‐6yrs) and aftercare play areas.

4 Where children are bottle-‐fed suitable safe space must be provided for effective cleaning and hygienic storage of the bottles. Cooling facilities should be available for the storage of baby food/bottles. Health education to be rendered pertaining to the cleaning of baby bottles as a means to prevent cross contamination / Diarrhoea.

5 One pottie for every child must be provided. Partially enclosed space for privacy must be made available during pottie time.

6 The potties must be washed and disinfected after each usage and the waste of the potties must be disposed of hygienically in a toilet.

7 Best available methods for the storage of soiled nappies must be provided.

8 Potties and nappies may not be cleaned near the food preparation and eating areas.

9 A wash hand basin with soap and clean hand drying material must be provided. Plastic buckets/basins and/or Squeezy bottles may be used in place of porcelain wash hand basins.

10 Such containers must be cleaned and the water changed regularly. It must be separate from the wash hand basin in the kitchen

11 Facilities for the washing of children (babies) must be provided.

12 Adequate covered, safe, clean and waterproof mattresses and or cots must be provided.

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13 Bedding should be provided and the blankets should be washed frequently.

14 A separate nappy changing and cloth nappy washing area must be provided.

15 A secure outdoor or refuse area for bins should be provided.

16 Adequate and clean drinking water must be available at all times. Where no tap water is available on site, a clean container with a tight fitting lid must be used for the storage of drinking water.

CHILDREN`S SECTION (2-‐6 YEARS)

17. An unobstructed indoor play area of at least 1,5m2 per child must be provided.

18. An outdoor play area of at least 2m2 per child must be provided. If no outdoor space is available,(permission MUST be sought from Council to use a nearest play park where children can play under close supervision of an adult)

19. The indoor and outdoor play areas must be separated from the infants and aftercare play areas.

20. Toilet facilities that are safe and hygienic for children must be provided.

21. Where access to a waterborne sewerage system is available toilets and wash hand basins must be provided in the ratio of one for every 20 children or part thereof, irrespective of the sex. Plastic buckets/basins and/or Squeezy Bottles may be used in place of porcelain wash hand basins. Soap and clean hand drying materials must be provided and such containers must be cleaned and the water changed regularly.

22. Where there is no access to a waterborne sewerage system an approved type toilet must be available or made available at or adjacent to the facility.

18


23. Toilet facilities must be of the low-‐level type, or alternatively platforms of suitable height must be provided at the water closet pans and wash hand basins to be used by children. Such platforms must be of a non-‐slip and impervious material.

24. Doors on the children’s toilet facilities should not have locks BUT must be screened for privacy.

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25. The hot water supply to the wash hand basins used by children must be thermostatically controlled at a suitable/safe temperature, alternatively, only cold water need to be provided.

26. Covered, safe, clean and waterproof mattresses and or cots must be provided.

27. Bedding should be provided and the blankets should be washed frequently.

AFTERCARE

28. An unobstructed indoor play area of at least 1,5m2 per child must be provided. Space to rest must also be provided.

29. An outdoor play area of at least 2m2 per child must be provided.

30. The indoor and outdoor play areas must be separated from the infants and children’s play areas.

31. Toilet facilities that are safe for children must be provided.

32. Separate toilets for both sexes and wash hand basins must be provided in the ratio of one to every 20 children or part thereof. Where separate toilet facilities are not available, lockable doors must be provided. Plastic buckets/basins and / or squeezy Bottles may be used in place of porcelain wash hand basins with soap and clean hand drying materials provided that such containers must be cleaned and water changed regularly.

FOOD HANDLING AREA

33. A separate area must be provided for the preparation of food

34. The area must be kept be safe, clean and in a hygienic condition at all times.

35. The area to the best possible means must be provided with:

a. Adequate washing up facilities

b. A hand washing facility for staff.

c. Adequate storage space for food and utensils

d. Adequate lighting and ventilation.

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e. Cooling facilities for the storage of perishable food.

f. Adequate number of waste bins with tight fitting lids.

g. An adequate supply of water and cleaning agents for the cleaning of equipment and eating utensils. Cleaning agents must be kept in their original containers and out of reach of children.

h. A hood and flue with an extraction fan and grease filters must be provided over the cooking apparatus or alternatively a domestic cooker hood, where applicable

i. Adequate crockery and cutlery for the number of children.

36. The entrance to the food handling area must be adequately protected to prevent children from gaining access thereto and safety aspects must be complied with.

37. A separate space (not necessarily a separate room) for the preparation of baby food must be provided.

38. When meals are provided the person in charge of the ECD/Principal must apply for and be in possession of a Certificate of Acceptability (COA) for Food Premises.

INDOOR PLAY AREA

39. The structure must be safe, waterproof and well ventilated and the safety aspects should be adequately addressed

40. Safety glass to be provided for low level windows and doors

41. In multi-‐storey buildings safety gates must be provided on both ends of stairs.

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42. Floors should be covered with material that is suitable for children to play and sit on and should be easy to clean.

43. If the same space is used as a playroom and office, each area must be clearly demarcated.

44. No objects that could pose a danger or be harmful to children may be stored in this

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area.

45. All furniture and equipment must be safe and in good repair.

46. All low level electrical sockets need to be suitably protected.

OUTDOOR PLAY AREA

47. The outdoor play area must be adequately fenced (1.8 m high), with safe and approved material, and secured with a safety gate that children cannot open. This will not apply to public open space

48. Outside play equipment must be safe and clean

49. No poisonous or harmful plants may be grown on the premises and the premises must not be overgrown.

50. The outside area can consist of lawn, sand pits, shady areas and hard surfaces.

51. All swimming pools must be covered with a net and have a surrounding fence of sufficient height with a lockable gate.

52. The sand pit must be covered overnight to prevent the fouling of the sand. It must be cleaned regularly by sprinkling it with coarse salt every 6 weeks or by wetting the sand with a bleach solution. The sand must be replaced at least once a year.

STAFF FACILITIES

53. An area that is adequately lighted and ventilated must be provided for use as an office, staffroom and sickbay or where possible these areas may be provided separately.

54. Sufficient toilet and hand washing facilities must be provided where more than 20 children are accommodated.

GENERAL

55. All refuse must be stored in such a manner so as not to cause a nuisance pending removal.

56. An adequate number of approved refuse receptacles with close-‐fitting lids must be provided.

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57. Insects and vermin must be effectively combated without posing a danger to children.

58. If pets are kept on the premises, they must be tame, clean, safe, healthy and well cared for, but must be kept separately from the children.

59. A first aid box with the basic essentials must be provided and stored out of reach of children. At least one staff member must have a valid First Aid Certificate at all times.

60. The owner must ensure that staff members are receiving appropriate and regular training on how to use the contents of the first aid box and how to deal with accidents.

61. Adequate supply of toilet paper must be provided.

62. Adequate measures must be taken to prevent the spread of infectious diseases.

63. The owner must ensure that staff members are receiving health education on TB and Diarrhoea, by focussing on personal hygiene, hand washing, advising regarding the availability of pamphlets, where testing can take place and where free treatment can be received.

64. The owner / principal must ensure that staff with infections and illnesses, must refrain from working with children and food. (This does not necessarily mean the termination of services.)

65. Owner to ensure that no person shall smoke or use any tobacco products in the presence of children in terms of the Tobacco Products Control Act No. 83 of 1993 (as amended) and all related Regulations.


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ANNEXURE 3: REQUIREMENTS FOR CLEARANCE FROM THE FIRE DEPARTMENT

1. Application for clearance will not be processed by the Fire Department unless the property is zoned correctly (Zoning certificate to be provided).

2. All buildings must be erected and approved in terms of the National Building Regulations and Standards Act (if applicable) (approved building plans may be called for). If there are no approved plans, the building/structure will be deemed as unauthorised and

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therefore fire clearance cannot be issued. Change of occupancy classification (e.g., using a garage, house, wendy house as a crèche) may require plan submission and approval.

3. Where the population (total population – children + teachers) exceeds 25 persons, an alternate means of escape (open in direction of emergency travel) is to be provided. The width of the escape is determined by the number of occupants.

4. Only approved locking devices (push bar panic bolt) are permitted on emergency escape doors.

5. Fire extinguishers (1 x 4,5kg per 200 square metres) are to be provided.

6. Fire hose reels may be called for where the floor area exceeds 250 square metres or the building exceeds a single storey in height.

7. Positions of escapes and fire fighting equipment are to be clearly identified by SANS 1186/5 approved symbolic safety signage.

8. All fire points are to be kept clear at all times.

9. Fire blanket may be called for in kitchen should food preparation/cooking take place.

10. Emergency action plan is to be formulated (written document) and tested once every 6 months.

ANNEXURE 4: BUILDING REGULATIONS

1. Although the different types of build-‐up areas and socio-‐economic situations in the City are acknowledged, it is the position that all ECD facilities (and their building plans) should comply with the minimum requirements as per the National Building Regulations and Standards Act.

2. This compliments the City’s viewpoint that there should not be a differentiation between health and safety requirements for different areas and to ensure a quality environment for all children to develop equally.

3. Where buildings do not comply, a combination of enforcement and support programmes should be used to encourage and assist such centres to move towards compliance.

4. Notwithstanding the above, the use of shipping containers and prefabricated structures is acceptable in principle but more detailed information is required before a proper assessment can be made, to this end a rational design prepared by a professionally

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registered person or persons will need to be submitted in the planning phases (a rational design is a process whereby compliance with the National Building Regulations is demonstrated by means of calculation and reasoning).

5. The rational design must indicate how Part B: Structural Design and Part T: Fire Protection of the National Building Regulations is complied with. The maintenance of fire safety distances is of particular importance in this regard. The rational design must also demonstrate that the structures meet the thermal performance criteria for the Western Cape. Poorly insulated buildings promote mould growth in the cold and wet winters and which leads to unhealthy living conditions.

6. The provision of water and sanitary facilities must be in terms of the National Building Regulations and the City’s Environmental Health requirements. The rational design can be based on a population density of 1.5m2 per person.


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Letter of Appreciation Dear Nomonde and Xolani, In the spirit of entrepreneurship and masikhule, Khomanani Consulting would like to thank you for the time and effort you have dedicated to working with us. Through all the meetings and and hard work, we have and continue to admire your motivation and passion for Eyona Educare and Nursing Centre. We thank you for providing us with the necessary information to allow for a successful engagement. It has been a pleasure and an honor to have worked beside you for the past 6 weeks in order to improve your business and grow together as individuals. We hope that the work we have accomplished together will not only benefit the business, but leave a lasting impact on the way you think about entrepreneurship. As a team, Khomanani Consulting would like to offer our best wishes for you and your business moving forward. Although we live far away, we are always a simple email away as a resource may you need assistance with anything in the future. Thinking beyond business, we will cherish this experience for the rest of our lives and can only hope you will remember us in the same way. Thanks again Nomonde and Xolani! Best regards Khomanani Consulting

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