BUSINESSWEEK ONLINE : FEBRUARY 5, 2001 ISSUE
FRONTIER -- FEATURES ONLINE EXTRA: Questing for Profit in Child Care Not every entrepreneur can admit strategic blunders, let alone respond to them. But Susan K. Dunkley does so with refreshing honesty, perhaps because she's confident she can turn things around. Dunkley is president of New Horizon Kids Quest Inc. of Plymouth, Minn., a publicly held company that operates 21 child-care centers in casinos and shopping centers nationwide, plus a chain of 14 conventional day-care centers in Idaho. When frontier profiled the company in July, 1999, it was apparent even then that Kids Quest had its hands full with falling stock prices and an ill-advised expansion. Kids Quest was launched by Dunkley and husband William, now the company's CEO, after 25 years of running a highly profitable private chain of day-care centers in Minnesota. Though the company raised $5 million in a 1995 IPO, its stock has fallen sharply -- from $12 in 1999 to less than $1 today. STANCHING THE FLOW. Where did Kids Quest go off track? If Dunkley had to do it all over again, she wouldn't have gone into the Idaho market, where the company's 14 centers have consistently lost money. "The problem was, they weren't used to paying for quality child care," says Dunkley. She also says it was a mistake to acquire existing facilities that needed extensive sprucing up. "We've learned it doesn't pay to go in and buy people's old stuff." Those lessons under her belt, Dunkley closed four of Kid Quest's most unprofitable centers in the past year and stanched the flow of red ink. In the future, the company will be aiming for strategic urban markets, rather than trying to saturate a single state. Fortunately, the prospects for beefing up business seem bright. The company has opened three new casino centers in the past year, two of which have employee day-care centers. Negotiations for 10 more casino centers over the next few years are in the pipeline. It's not child's play, but Dunkley thinks quality-based day care will find its market. By Stephanie B. Goldberg _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Where Are They Now? Spin Master Plays to Win Even Cowgirls Pay Their Dues The Art of the Startup A Seat on the Roller Coaster Broken Headbone He's Got Ink in His Veins An Emu in Every Pot? Now He's Talking California Dreaming It Wasn't About the Money The Crunch at Emergency Solutions ONLINE EXTRA: For a Candymaker, Success Is Sweet ONLINE EXTRA: Questing for Profit in Child Care ONLINE EXTRA: A Bicycle Builder Peddles Her Own Wares ONLINE EXTRA: A Web Designer's Minimalist Approach INTERACT E-Mail to Business Week Online

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