It started with a single student. That’s who Evelyn Taveras welcomed in May 2014 when she opened the doors to Bee Creative Academy, a West Park preschool. In three weeks, Taveras had three students. Over the past year, the business has blossomed, with 59 children ages 1 to 5, and eight employees. Bee Creative offers voluntary prekindergarten, or VPK, preschool and after-school performing arts classes.
Lured to South Florida by the good weather, Taveras moved to Hallandale Beach in 2012. With an MBA, and experience in general management and human resources at a Columbia University nonprofit in New York, Taveras was ripe for a business opportunity. As a mom, she found herself pulled toward early education.
“I researched the market to look for needs,” Taveras said. “I love children, and I’m a firm believer in education, so I just combined my loves.”
Now, at near-capacity in West Park, Taveras wants to expand to a second location. She is looking at nearby sites that would require construction, as well as an established preschool for sale about 40 minutes away. Two potential business partners have approached her to collaborate, and she is considering her options for expansion.
“We’re all in it for the best interests of the children,” she said.
Taveras asked the Miami Herald for a Small Business Makeover, and the Herald brought in Broward SCORE, a nonprofit with volunteer counselors from the business community who mentor small business owners. The SCORE tune-up team was led by David Harris, director of marketing, Greenway Golf Course Management, whose expertise is operational management, fiscal controls and marketing. Other team members were George Gremse, Broward SCORE chairman, whose expertise is management, mergers and acquisitions and joint ventures, and Vincent Caldevilla, Broward SCORE operations chairman, whose expertise is operations, project management and multilocation management.
“You are only a year old and your business is doing well. You are cash-flow-positive, and you are paying yourself back for what you invested in the business,” Gremse said. Now you have to grow strategically so you don’t jeopardize the future of the business, he said.
Here is the SCORE team’s advice:
Flesh out expansion plans: “Write down your short-term and long-term goals before making a decision,” Caldevilla said. “Make sure your personal goals are in line with what you want to do in five years.” Create an expansion plan and keep projected financials up to date, which will help when applying for a loan, Harris said. Do a two-year financial projection, Gremse said. Will the new location’s performance support the cost of financing the purchase? Create a management plan and budget that details personnel expectations and sets goals and incentives, he said. Do a “self-assessment” of what was learned while opening the first location, Caldevilla said. “Apply these lessons learned to the operations of any additional locations,” he said.
Grow the existing business: If after-school programs have growth potential, do a cost/benefit analysis before making capital investments such as a van, Gremse said. Examine existing financial and operating controls for maximum efficiency, Caldevilla said. Review financial recording, payment processing, expense disbursement, inventory control and facility security. “A hard look at these factors will usually produce improved profitability,” he said.
Upgrade accounting: Taveras uses software to track monthly cash flow. Harris said that as she grows, she may need more accounting expertise. Hire an accountant or virtual accounting service with experience in child-care businesses, he said. Make sure the business is producing adequate cash flow, now and in the future, to support additional locations, Harris said. An outside firm can validate statements and make sure they are accurate, Caldevilla said. “Quite often as a business grows, they don’t pay attention to financial monitoring,” Harris said. “That’s a big mistake. It’s crucial. You need regular status reports on how you are doing.”
Find capital: An SBA loan that uses the existing business as collateral could provide operating capital and allow expansion to a second location without taking on a partner, Harris said. Government and bank loan programs for minority-owned businesses also may help, he said. The Hispanic Business Initiative Fund, Metro Broward and Accion may be sources of capital, Gremse said.
Think legalities through: Put an ironclad legal structure in place, Gremse said. A second location should be its own small corporation (S-Corp), or limited liability corporation, LLC. “So if one goes bankrupt, it won’t take down the other,” he said. If buying an existing business, hire an attorney experienced in business acquisitions to review the purchase agreement and building lease. Have an accountant review a two- to three-year financial history of the business. Use a professional business broker to evaluate the purchase price based on comparable property sales in the same child-care business category. Do research on its customer satisfaction rating, Internet reviews, code violations and legal issues. Use a “Due Diligence Checklist” from BrowardScore.org to make sure all bases are covered. “Some small business owners don’t want to spend the money. They say ‘I can read a contract,’” Harris said. “You may be able to read what’s there. But what about the things that are not in there?”
Replace yourself: Have a succession plan in place, Caldevilla said. “Have people in training to replace you and other key staff members,” he said. Taveras has a successor in training to become director of the West Park location, to free herself up for a second location. Don’t stop there, Caldevilla said. “Have a plan for when your replacement is ready,” he said.
Research potential business partners: Look at résumés, hire a company to do a background check, and interview past employers, Caldevilla said. “If you bring in a partner, put a plan in writing at the beginning to start, manage and dissolve the business,” he said. “It’s better to do this when everyone’s mind is open, rather than later when issues develop.” If the partner’s role is investor and not management, spell that out in the agreement, Gremse said. Taveras also can bring in a partner for the short term and dissolve the partnership later, Caldevilla said.
Investigate potential second location: Is owner financing available? What are the terms of the lease? “When you are buying a business that is renting, you need to know the terms of the lease,” Gremse said. “Landlords die or sell properties, and the new owner may want to change the lease. You want to have a long enough term to recoup your investment.”
Evaluate branding: If Taveras buys an existing preschool, she needs to decide whether to rename it or keep the existing name. “If it were a closer location, it would be advantageous to rebrand and strengthen the existing brand,” Gremse said. “But if it’s further away, it’s less of an issue.” Another option is to use a tagline that incorporates the mother ship’s brand name, he said. Ultimately, if Taveras is trying to create a brand, everything should be under one name, Harris said. “It will keep things consistent, and be more cost-efficient down the line to have one website and one social media presence,” he said.
Digital marketing: To strengthen the brand, use email newsletters to reach out to already loyal customers, and let them know about summer camps or referral programs, Harris said. Use free business listings on Yelp, Google My Business and Bing Places for Business, and on education sites like GreatSchools.org. Make sure they are complete and use photos and video. “These ‘back links’ to your website will improve your SEO on all the major search engines,” Harris said. Create a YouTube channel to help SEO. Complete a Google+ profile, Gremse said. “It’s part of Google’s algorithm to determine rankings in online searches,” he said. “Beef it up to help rank you higher.” Post interactive content on social media and encourage followers to engage with photos, comments and reviews.
Update website: As the business grows, continue to tweak the website. Put the most important information and a call-to-action up high, Caldevilla said. Add personal background information to the mission statement to increase credibility, Harris said. Use good reviews from Facebook as testimonials on the website, he said. “If a parent is going to trust a young child to a business, they want to see good reviews,” Harris said. Use Google’s mobile friendly tool to determine whether the website is easy to use on a mobile device, he said. Improve search engine ranking by adding the surrounding communities served. Use those cities in keywords and tags for each page of the site.
Taveras said she found the makeover process valuable. “It’s been an eye-opener,” she said. “Even with my business background, every time we met, I learned something.”
▪ Client: Bee Creative Academy, 4009 W. Hallandale Beach Blvd., West Park. Founded in 2014, Bee Creative Academy offers preschool and voluntary pre-kindergarten. The business has eight employees and serves 59 children.
▪ Experts: David Harris, director of marketing, Greenway Golf Course Management; George Gremse, chairman, Broward SCORE; and Vincent Caldevilla, operations chairman, Broward SCORE.
▪ Challenge: To expand to a second location and plan for growth.
▪ Advice: Flesh out expansion plans. Upgrade accounting and operations. Evaluate potential business partners and acquisitions. Create a succession plan. Fine-tune digital marketing to help in branding.
Based in Washington, D.C., SCORE is a nonprofit with more than 12,000 volunteers working out of about 400 chapters around the country offering free counseling to small businesses. There are seven chapters on Florida’s east coast, including Broward SCORE which has more than 60 volunteer counselors.
Counselors from Broward SCORE meet with small business owners and offer free one-on-one counseling as well as dozens of low-cost workshops, such as “Supercharge Your Website” on Tuesday and “Build Your Brand” on Wednesday. See more under “Local Workshops” at www.broward.score.org.
How to apply for a Small-Business Makeover
Business Monday’s Small Business Makeovers focus on a particular aspect of a business that needs help. Experts in the community will provide the advice. If you would like a makeover, concentrate on one aspect of your business that needs help — corporate organization, marketing, financing, for example — and tell us what your problems are.
The makeover is open to companies in Broward or Miami-Dade counties in business at least two years. Email your request to rclarke@MiamiHerald.com and put “Makeover” in the subject line.