1. Child Care That Cares A group of your friends got together and decided to start a childcare business in their town. The town currently has three other childcare centers. The clients are mostly the children of working parents. Your friends realize that they are going to enter a market that already has competition and that they will have to compete for the same customers. Their goal is to attract as many customers as possible, keep their prices within reach, be different, and at the same time make profits in the long run. Your friends approached you to ask you the following questions to help them make the best business decision: If we provide a bit different services than the competition, such as longer hours, healthy lunch, and smaller staff to children ratio, do you think we can charge significantly higher prices than our competition? Explain why. Given that we have competition, what do we need to do to make our business profitable? How can we determine whether we are making profits? What do we need to figure out to determine whether we are making profits, breaking even, or making losses?

A group of your friends got together and decided to start a childcare business in their town. The town currently has three other childcare centers. The clients are mostly the children of working parents. Your friends realize that they are going to enter a market that already has competition and that they will have to compete for the same customers. Their goal is to attract as many customers as possible, keep their prices within reach, be different, and at the same time make profits in the long run. Your friends approached you to ask you the following questions to help them make the best business decision:

• If we provide a bit different services than the competition, such as longer hours, healthy lunch, and smaller staff to children ratio, do you think we can charge significantly higher prices than our competition? Explain why.
• Given that we have competition, what do we need to do to make our business profitable?
• How can we determine whether we are making profits? What do we need to figure out to determine whether we are making profits, breaking even, or making losses?