How to Write a Business Plan for Daycare and Preschool

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  • Running a business

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Writing a daycare or preschool business plan is a big task, but due diligence and hard work will help you understand what you’ll need to launch and run a daycare or preschool successfully.

people sitting around a table reviewing a business graph

What do daycare investors want?

Your local government will have rules and regulations you’ll need to follow as a small business owner and childcare provider. Start by reviewing the Child Care Aware of America's licensing guidelines for your state and city. Once you’re clear on licensing guidelines, you’re ready to start writing your childcare business plan.

The purpose of a business plan is to help secure funding. You’ll likely need financing to launch your preschool or daycare, especially if you want to avoid the monthly repayment of a loan. 

Investors provide businesses with money in exchange for partial ownership. As a result, they expect a larger return on their initial investment. Because many investors work in business, they prefer to invest in an established company.

Most investors look for:

Industry background and experience

Financial performance and promise.

Investors want to make money. Therefore, they are more inclined to work with experienced entrepreneurs and business owners to guarantee a return on their investment. 

This might sound discouraging for those with little experience or without a business management background, but the opportunity doesn’t end there. You could consider bringing on a partner with a business background. Additionally, many investors act as a source of business advice. 

You need to demonstrate that your business will make money. Investors will likely want to see signs of business growth before they give you money. 

Additionally, investors will want to know about your financial stability. Questions an investor might ask are:

Of course, every investor is different, so they’ll consider various factors. While experience and financial promise are at the top of the list for most investors, they might also look for uniqueness, business readiness, an effective business model, and more.

Writing a daycare business plan

A women using a calculating and holding cash

We’ve discussed licensing and investors. Now, you’re ready to begin the framework of your business plan for daycares and preschools. Here’s what you’ll need to get started:

Business description

Needs assessment, insurance policies, operating policies and procedures, marketing strategy.

Start with the basics: what does your daycare do ? Detailing the service you’re offering will help you create a clear business plan. Next, you might want to write some goals or even a mission statement outlining your purpose and motivation.

Start by looking at general daycare or preschool industry trends, then narrow your scope to the preschools or daycares in your local area. Next, you’ll need to figure out who your target customers are and confirm that there is a need for a business like yours in your community. 

Are there a lot of young families in your neighborhood? Are you located somewhere convenient for commuting parents? Does your business offer a specific service that your competitors don’t, like early check-in or extended hours? 

Also, check out the competition. Research the existing daycare or preschool options in your community. Look at current preschool or daycare business plan samples. What makes your daycare or preschool unique? 

Developing detailed budgets will help you run your small business. You’ll need to compare your current cash flow and expenditures to determine whether you’ll make a profit.

Build a budget for unexpected costs. For example, how many children do you need to serve to be able to pay your bills and stay afloat? Child Care Aware offers some terrific budgeting resources for this process.

Depending on the type and size of your preschool, you’ll need insurance policies of several different types, including liability, property, workers’ compensation, and business insurance. Check the licensing requirements for guidance in building this part of your preschool business plan.

Create a comprehensive handbook for families and staff that includes you center's policies and procedures. For instance, you'll need to develop an emergency plan , daycare sick policy , and other safety protocols according to your local childcare licensing requirements. 

Your staff handbook should be a helpful resource your employees can reference and include all your employment policies including work and pay schedules, benefits, and information about professional growth and development. You can also include information on your center's philosophy and curriculum, classroom procedures, and expectations for working with children and families.

Your marketing strategy is the key to attracting customers. Decide what type of advertising you will use in front of potential customers. For example, list your school in local directories and participate in parenting and kid-friendly community events. Run a social media campaign focusing on your target population.

Another big part of childcare business marketing is differentiating yourself from other preschools. These days adopting daycare software is a surefire way to attract families with young children. A tool like brightwheel's center management feature will streamline your center's admission process, record keeping, and reporting, saving you up to 20 hours per month. 

You can also use brightwheel for recording and tracking daily events and activities, and sending real-time updates to families throughout the day. It also offers secure, digital check-in/check-out and a paperless billing system. This is a great way to keep your families looped in on daily activities and handle all of your administrative tasks in one place.

Your business is ready!

Writing a business plan can be stressful, but it doesn’t have to be. Once you secure the proper licensing, use the information in this article to guide you through creating a solid daycare business plan that drives investors and financing to your business.

These are just the basics to get you started. For further information, the U.S. Small Business Administration’s website has detailed instructions on creating each necessary part of a successful business plan. 

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Daycare Business Plan Template

Business Plan Outline

Daycare Business Plan

You’ve come to the right place to easily complete your daycare business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their daycares.

How To Write a Daycare Business Plan & Example

Below are links to each section of your daycare business plan template:

Next Section: Executive Summary >

Daycare Business Plan FAQs

What is a daycare business plan.

A daycare business plan is a plan to start and/or grow your daycare business. Among other things, a good daycare business plan will outline your business concept, identify your target customers, present research about the child care industry, detail your marketing plan, and provide your financial plan.

You can  easily complete your daycare business plan using our Daycare Business Plan Template here .

What Are the Main Types of Daycare Businesses?

There are different types of daycare businesses that parents can choose from for their child's needs. A traditional daycare center is most sought after by working parents since it provides child care during regular work hours. There are also in-home daycare centers that are licensed to provide child care in a home setting with fewer children. Other child care centers provide hourly care services by trusted babysitters or nannies and are operating on an as-needed basis.

What Are the Main Sources of Revenues and Expenses for a Daycare Business?

The primary source of revenue for a daycare business is its child care services.

Some key expenses for a daycare business is rent, salaries for staff, utilities and snacks expenses for the children.

How Do You Get Funding for Your Daycare Business Plan?

A daycare business is typically funded through small business loans, personal savings, credit card financing and/or angel investors.

What are the Steps To Start a Daycare Business?

Starting a daycare business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Daycare Business Plan - The first step in starting a business is to create a detailed daycare business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your daycare business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your daycare business is in compliance with local laws.

3. Register Your Daycare Business - Once you have chosen a legal structure, the next step is to register your daycare business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your daycare business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Daycare Equipment & Supplies - In order to start your daycare business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your daycare business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful daycare business:

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How to Start a Day Care: A Step-by-Step Guide

Caroline Goldstein

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

If you’re a teacher, former teacher, or simply have years of experience caring for children — and an entrepreneurial streak — you might have considered starting your own day care center, either from home or in a dedicated facility. And at an expected job growth of 7% over the next decade, working in child care is a stable career choice. So, if you’re seriously wondering how to start a day care center, you’ve come to the right place.

As is the case starting a business in any industry, however, your passion for your craft alone — or, in this case, your students — isn’t quite enough to ensure that your day care business is copacetic, either financially or legally. You’ll need to do a good amount of due diligence when looking into how to start a day care business, paying special attention to licensing requirements, and ensuring that your facility and program aligns with your state’s health and safety codes.

If you’re a pro at educating, training, supporting and generally corralling large groups of small children, you should be pretty unperturbed by the work it takes to start a day care business. Here’s what you need to know.

How to start a day care business

Although every path toward starting a business looks different for every business owner, there are a few steps that every aspiring day care owner needs to think about when it comes to how to best start a day care.

1. Decide what kind of day care business you want to start

Before you can even get to writing a business plan for your day care business, you need to decide what kind you want to open. Look into whether you want to start a day care business at home, or whether you want a more commercial facility — there might be different permits required in your municipality depending on which you choose. You also need to decide what age groups you want to focus on.

Next up, you'll have to decide on a business entity, which will have huge effects on the way you're taxed and how you operate your day care business. Will you have partners or open your business on your own? Additionally, you'll want to consider whether you want a business entity that offers you some protection. Making your day care center a limited liability company might be a good move, since the business will take on liability should anything go wrong.

You might also decide to buy into a day care franchise opportunity. This option will significantly streamline the steps you need to take in opening your day care.

Once you narrow down these details about your business, you can move on to the next step in starting a day care business: writing a business plan.

2. Write a day care business plan

This is a step you have to take when starting any business and it can be quite a bit of work, especially for anyone looking to get moving quickly on their business. When you start writing a business plan, start with an outline of all the things you want to include.

Your plan should include a summary, an overview of the company, a market analysis that includes an assessment of the need for a business like yours, a marketing and sales plan, and a financial plan along with financial projections. Don't worry, though, you can always add to it as your business grows.

One thing you should include, though, is market research. The last thing you want to do is go through all of these "how to start a day care business" steps, only to find that there isn't a market for one or that there are already too many day cares in that area to make it a viable business.

Your business plan should also include a budget. The costs associated with opening and running your day care center can never be accurately totaled, but nailing down a budget will give you some parameters to work within (and some peace of mind).

In your budget plan, don’t forget to factor in:

Your startup costs, including day care equipment, food, toys and educational tools, wages, insurance and licensing.

How much tuition you’ll charge.

Your predicted revenue over the next two to three years.

When you’ll break even.

Also know that day care centers can claim certain tax deductions, which can ease your annual financial burden.

You'll also want to include a marketing plan. If you’re seriously researching how to start a day care business, it’s likely that you’ve already been caring for children in your area for some time and have built up a network of local parents. That’s one valuable method of attracting customers (aka word of mouth) covered. Still, implementing even a basic marketing plan can help define and legitimize your business — and if you need to implement a waitlist as a result, that’s great too!

Your marketing efforts can be relatively simple and low-cost. You can start by creating a Facebook page for your day care center and building a business website, making sure to include your contact information and a little bit about your business. If possible, plan to include pictures of your facilities and testimonials from happy customers.

If you’re a fan of social media, it also can’t hurt to create an Instagram, LinkedIn and/or Twitter account to keep both current and prospective customers updated on your business. Just be sure that once you do, you receive permission from parents or guardians before posting pictures of their children, of course.

Analog marketing techniques would work well here, too. If possible, consider distributing flyers or brochures to nearby libraries, schools, places of worship or any other local gathering spots.

3. Obtain the necessary certification and licenses

You may not need a master’s degree in education to become a day care teacher, but each state does require some combination of licensing and certification when it comes to how to start a day care. Visit your state’s Division of Child Care Services (or its equivalent) to find out the training, experience and credentials you need to legally operate a day care facility.

In New York State, for instance, the head of the day care facility must have one of the following:

An associate degree in early childhood education or an equivalent.

A CDA credential (child development associate) and at least two years of experience caring for children.

A high school diploma and at least three years’ experience caring for children.

You'll probably find that there are some other requirements that usually come up when you're looking up how to start a day care business at home or in another facility. Your state may require that you and any staff you hire are CPR-certified, for one. Another point of safety to remember is that you should be trained in at least basic first aid for children. You and your staff might also need to be fingerprinted and undergo background checks before being cleared for work.

Even if your state doesn’t require that you obtain a license, you should consider doing so, as your licensing course will go over all the boxes you need to check to operate your day care in your state — including health and safety regulations, proper food preparation and the required child-to-adult ratio.

4. Find a (safe) day care facility

In certain states, in order to obtain the proper licenses or registration to start your day care business, you’ll first need to show that your day care facility meets your state’s health and safety requirements.

So whether you choose to open your day care facility in your own home, or buy or lease a new property, you’ll need to make sure your facility meets zoning, fire, and health and safety laws. When it comes to how to start a day care at home, you may need to make alterations to your house to comply with day care requirements in your state, so be sure to factor them into your budget.

5. Get insured

Another requirement for obtaining your license? Getting insured. In certain states, you’ll need to be licensed by the Department of Health and Human Services to run your day care center, but to do so, you’ll first need liability insurance.

The exception is home-based day care centers, which don’t need insurance to be licensed by the DHHS. Still, those opening day care centers at home should seriously consider obtaining small business insurance. You always run the risk of a lawsuit when you’re running your own business, but that risk increases when caring for other people’s children — so protect yourself whenever possible.

There are several types of insurance that cover day care businesses — general liability insurance, workers’ compensation, property insurance, abuse and molestation insurance and others — so contact an insurance broker to help you decide which coverage is best for your business.

how to create a business plan for a daycare center

6. Get a business checking account and credit card

Get a business credit card and a business checking account early on to help you keep your business expenses separate from your personal expenses when first starting a day care.

It’s crucial to separate your personal and business expenses for many reasons, not the least of which is to reduce your (or your accountant’s) burden come tax season. It’s simply the most professional way to conduct your business, too. Set yourself up for success now by signing up for a business credit card and opening a business bank account, and be diligent about using both solely for your day care’s finances.

Having a business credit card can help you increase your business credit score, too. By paying the card off on time — or early if you can — you can boost your score, which will help you late on when you need a loan or other financing for your day care business.

7. Get financing

Most entrepreneurs bootstrap their businesses at the beginning, as it’s difficult for brand-new businesses with limited credit history to secure a business loan, either from a bank or from an alternative lender.

Your financing options aren’t limited to your own purse strings (or your friends’ and family’s). Here are a few other ways to get funding and loans for a child care business:

SBA microloan

Although most SBA loans are available only to businesses with a few years of experience under their belts, SBA microloans are actually designed to help startups get off the ground. They’re especially accessible to women, veterans, minorities and business owners in low-income areas. And unlike most other SBA loan programs, SBA microloans are disbursed by nonprofit lenders, rather than banks.

As the name suggests, SBA microloans tend to be on the smaller side, with amounts capped at $50,000, but they may be as low as $500. (For more context, the average microloan amount was $14,000 in 2017.) And because microloans are designed for new businesses, business owners with average or even challenged credit may still be accepted, as long as other aspects of their SBA loan applications are in good shape.

SBA community advantage

These loans from the SBA have all of the advantages that come with SBA microloans but the community advantage loans are specifically for businesses that are serving traditionally underserved communities. These loans are generally for a higher dollar amount than the microloans and can go a bit further for your business.

Government grants

You might be able to obtain financial assistance to start and run your day care through state or federal funding programs for early childhood education providers. For instance, you can contact your state’s Child Care and Development Fund Plan to look into startup funds, or your state’s school meal contacts to seek funding for your day care center’s meals.

Take a look at the Administration for Children and Families Office of Child Care’s list for a more comprehensive overview of federal and state financing programs for child care centers .

Business credit card

It’s important to use a business credit card to keep your day care’s expenses separate from your own. Of course, using a credit card is also the most convenient way to pay for your daily expenses. And since credit limits for business credit cards tend to exceed those of consumer cards, you can spend more liberally without worrying about maxing out your card.

Another bonus? Using your business card responsibly (by which we mostly mean paying off your balance in full and on time, every month) can help you build business credit. And with a healthy business credit score, you’re in a better position to secure business loans with great terms down the line.

If you opt for a card with a long 0% intro APR period, you can essentially use that introductory grace period as an interest-free loan. Look into the American Express Blue Business Plus card, which, at 12 months, carries one of the longest interest-free introductory periods in a business credit card right now.

After your 12 interest-free months are up, though, a variable APR kicks in at a rate depending on your creditworthiness and the market. Check the issuer's terms and conditions for the latest APR information.

8. Hire staff

You may be planning on running your day care facility solo, but depending on your state and the number of children you’re looking after, that might not be an option — every state sets a required ratio of staff to children to ensure that every child receives adequate care. They also dictate the maximum number of children permitted in a group.

Adult-to-child ratios and class sizes depend on the age of the children, but they might also depend on the size of the day care facility, or face further restrictions based on municipality. For a day care center in New York state, for example, the state requires one adult for six children under school age. However, in New York City, there must be two teachers or one teacher and one assistant to every six children aged 2 to 3, with a maximum of 12 students allowed in a single group. Your own children may or may not be included in that count, too.

So, while hiring really depends upon your state’s requirements, it makes sense to leave room for hiring staff in your business budget. That way, you’ll be prepared for growth, without worrying about your operation shutting down because you’re not properly prepared for it. (Just keep in mind that any staff you hire needs to be appropriately licensed or trained for it, and potentially undergo a background check.)

9. Write your day care contract and policies

To further legally protect your business, it’s crucial that you draw up a contract, write out your day care policies, and require that potential clients (or, more likely, the parents of potential clients) review and sign both documents before accepting their patronage.

If you're just starting to read up on how to start a day care business, you might not be clear on the distinction between these two documents. To clarify, your contract is the document stating that you’ll provide child care, be compensated for providing care according to the payment terms you specify, and have the right to terminate providing care.

Your policies, on the other hand, provide parents with important logistical information regarding how you’ll run your day care center. There, you can outline protocol regarding vacation, illness, inclement weather, drop-off and pickup times, curriculum, field trips, and anything else you believe is important for your clients to understand and agree to about your day care center. logo

Child Care Business Plan Template

Child Care Business Plan Template

Download our Child Care Business Plan Template here

What Is a Business Plan?

child care kids smiling

Why You Need a Business Plan

If you’re looking to start a child care business or grow your existing one you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your child care in order to improve your chances of success. Your child care business plan is a living document that should be updated annually as your company grows and changes.  

Source of Funding for Child Care Businesses

With regards to funding, the main sources of funding for a child care business are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a child care is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a child care business.  

kids playing chess

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of child care business you are operating and the status; for example, are you a startup, do you have a child care that you would like to grow, or are you operating a chain of child care businesses.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the child care industry. Discuss the type of child care you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of child care business you are operating.

For example, you might operate one of the following types:

  In addition to explaining the type of child care you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

child care children drawing

Industry Analysis

In your industry analysis, you need to provide an overview of the child care business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the child care industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards child care that includes transportation, it would be helpful to ensure your plan calls for such a service.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your child care business plan:

child care boys laptop

Customer Analysis

The customer analysis section of your child care business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: soccer moms, young families, baby boomers caring for grandchildren, etc.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most child care businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other child care businesses.

Indirect competitors are other options that customers have that aren’t direct competitors. This includes keeping children at home and/or after school programs among others.

With regards to direct competition, you want to detail the other child care businesses with which you compete. Most likely, your direct competitors will be child care businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

  With regards to the last two questions, think about your answers from the customers’ perspective.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

child care mentoring

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a child care business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of child care that you documented in your Company Analysis. Then, detail the specific services you will be offering. For example, will you over technology or exercise classes to the children?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu items you offer and their prices.

Place : Place refers to the location of your child care. Document your location and mention how the location will impact your success. For example, is your child care located next to a heavily populated office building, or gym, etc. Discuss how your location might provide a steady stream of customers.

Promotions : the final part of your child care marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your child care such as discussions with prospective new customers, procuring supplies, keeping the child care center, etc.

teaching computers

Management Team

To demonstrate your child care’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in the child care business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in child care businesses and/or successfully running retail and small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 10 children per day or 50? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

child care children playing

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 child care contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a child care center:

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your child care center design blueprint or location lease.  

Putting together a business plan for your child care is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the child care business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful child care.

Download Our Child Care Business Plan PDF

You can download our child care business plan PDF here . This is a business plan template you can use in PDF format.

How to Finish Your Childcare Business Plan in 1 Day!

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Childcare Business Plan FAQs

What is the easiest way to complete my child care business plan.

Growthink's Ultimate Child Care Business Plan Template allows you to quickly and easily complete your Child Care Business Plan.

Where Can I Download a Free Child Care Business Plan PDF?

You can download our child care business plan PDF template here . This is a business plan template you can use in PDF format.

Other Helpful Business Plan Articles & Templates

Business Plan Template & Guide for Small Businesses

Daycare Business Model Canvas Example

Daycare Business Model Canvas Example

Creating a business model canvas for your daycare is a great way to innovate and upgrade your current business plan. With a typical business plan, even if you are trying to be as concise as possible, it usually turns out wordy, long, and unappetizing for the reader.

To create your business model canvas for your daycare, you need to complete these 9 sections:

Table of Contents

1. Customer segments

You can break down customer segments by:

Our second is single parents who have an income between $45,000 to $100,000 per year. Similar to the previous group, these individuals are needing childcare so they can keep their job since they are a single income family.

2. Customer relationships

3. channels, 4.value propositions.

Your value proposition is the reason why customers should come to your facility instead of the competition. It is the thing, or things, that your business does better than everyone else.

5. Key activities

These are the things you are doing to follow through on your value proposition. How are you going to provide your exceptional service to the customer? These can be things like:

6. Key resources

7. key partnerships, 8. revenue streams.

The bulk of our revenue, about 80%, is currently coming from child care. Right now we have about 10% coming in from summer camps and 10% from parenting classes. This summer we are hoping to offer 2 more camps to increase revenue. We are also trying to put together some online instructional videos from our parenting classes and sell those online.

9. Cost structure

We will have 4 child care providers employed and 4 support staff to assist. In total, we plan on budgeting $12,000/mo for child care providers and $8,000/mo for support staff.

Meet Shawn Chun: Entrepreneur and Childcare Business Fan.


← how to write a business plan for your daycare center, how to write a business plan for your daycare center.


Here we have put together a list of key elements to help write a successful business plan for your daycare center.

Do Your   Research

The first step to developing a business plan for your daycare center is to do your research. Look at what your competitors are doing – think about what makes them successful and/or their pitfalls.

Do they have a unique mission statement? Does their staff follow a specific teaching philosophy? Realizing other daycares’ competitive advantages will help you identify any gaps that these centers are not filling.

You’ll also want to research the demographics of your area. What does a typical family in your area look like? In some areas it’s typical for both parents to work, but in others it’s not. You may also want to look into things like education level, religion, income level, how many children are in a typical family, as well as grandparent involvement and common  values .

Will the values and interests of your daycare center be appealing to the families that surround it? Research is a huge part of  creating a daycare business , and it’s something you’ll want to be thorough with before fully diving in.

Develop a Mission Statement

When you think about what you aspire your daycare to be, a lot of things likely come to mind. You have big dreams after all! However, it is important to start with the basics and develop a mission statement.

This should be a relatively simple vision you have for your center that can be shared on marketing collateral and is appealing to prospective parents. Whether it’s a focus on  early childhood development  or a particular teaching philosophy you believe in, you’ll want to present your mission statement boldly and confidently.

Once you develop a mission statement, it’s time to think about your other goals and objectives. But, what’s the difference between goals and objectives?

Creating a clear mission statement and supporting goals and objectives is key to setting yourself up for success. Whenever you feel overwhelmed or unsure of the direction of your daycare center, check back in with your mission statement, goals and objectives to ground yourself

Look at Your Financials

Financials may not be the most fun part of starting a daycare business, but they are certainly important. While you may have the passion and expertise needed to fuel a new business, without the right financial standing, it’s hard to turn your dreams into a reality.


A common question you may ask yourself is,  “How much does it cost to start a daycare?”  While the number will certainly vary wildly depending on the area you live in and whether you are acquiring an already owned building or starting from scratch, experts say it will cost you anywhere from  $10,000 to $50,000.  Think about whether it’s realistic to start your daycare now or continue saving up until you’re ready – it’s a big investment!

For those who are just starting out and may not have that much financial experience,  daycare software  can be a huge help. It helps simplify paying your bills, easily track expenses, and handle budgeting – all from a single platform.

Use daycare software to maintain a record of your expense categories like classroom supplies, maintenance, utilities, and rent, and ensure that nothing gets lost and you’re always on budget. One expense gone wrong can have a huge impact on a new business, so keeping your data and information all in one place is highly recommended.

Develop Policies & Procedures

A successful business plan needs information about the daycare center’s policies and procedures. Policies and procedures are the foundation of a new business, and they are something you’ll want parents to have a firm understanding of.

To start with, think about developing a  payment policy . This will entail things like how to handle late payments, billing schedules, and more.

It’s also important to take note of any licensing requirements for staff ratios and teachers’ educational backgrounds. Child care staff are subject to fingerprinting and background checks, so be sure to verify references and education levels.

Learn About Insurance

Insurance is a requirement for opening a licensed child care facility, and having it is essential for protecting both your business and your personal assets. While understanding insurance may not come naturally to everyone, there are a lot of resources on the internet and professionals willing to help.

Talk with a licensed insurance agent who’s familiar with local requirements to review your needs and recommend coverage terms and policies. And, if you plan on offering healthcare benefits to your employees, you’ll want to meet with a healthcare provider who can help with developing a plan.

Create a Marketing Plan

Here comes the fun part. What’s going to make your daycare center stand out among the competition? How are you going to get your name out into the community?

Start by deciding how you’ll raise awareness among potential customers. Maybe it’s participating in family-friendly community events in the area or listing your school in a local directory. You can even think about running a social media campaign to build awareness and reach new parents.


And as far as differentiating yourself from other daycares, consider implementing  Procare’s all-in-one daycare solution  designed to help manage your daycare and stay connected with parents.

For modern parents who are on the go, joining a daycare with a tech-savvy management system in place can be incredibly appealing. With the ability to  make payments online , digitally check in/check out, and read about updates on their child throughout the day, this kind of software will definitely give you a leg up.

Final Thoughts

Creating a business plan for your daycare center is a lot of hard work, but it can also be exciting. You are at the beginning stage of making your dreams a reality and by organizing your ideas, policies, marketing plans, and more in a logical document, you are setting yourself up for success – and for a lot of future happy parents and children.

Ready for next steps? Learn more about how to successfully  start a daycare .

We know the business of child care. For more than 30 years we’ve been guiding child care professionals just like you to help stay connected and in control.

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How to Write a Business Plan for Starting a Day Care Center

How to Write a Business Plan for a Salon

What are the key elements of a business plan, how to pitch a business plan.

Writing a business plan for starting a day care center will serve a few different purposes. First, a business plan may help you organize your ideas for launching your business by identifying the steps you need for business start-up. A day care center business plan will also help you stay on track after you've launched your business and as you move toward meeting your goals. A business plan isn't necessarily set in stone, however, and you can adjust it periodically as your business grows or your plans change.

In addition, a business plan demonstrates you have carefully thought through the operations of your daycare business; it can be used to show lenders why they should help you finance your business.

Create Your Company Description

Create a general overview of your day care business plans. Write a brief summary of your goals and include why you think starting a day care business is a good idea. Include a description of your own experience and qualifications as well as your expectations for staff.

Provide A Market Analysis

Include an analysis of the day care center industry. List information about day care industry tends and estimate day care industry revenue. Include information about the needs of your target market and how its day care needs are currently being addressed. Include information about how you will position your day care center business for success despite the competition.

Detail Your Marketing Plan

Include details about plans for pricing and advertising your business. Plan how you will communicate your day care business' benefits to your target market.

Outline Your Organization and Management

Describe the legal structure you will choose for your business. For example, if you will be the sole owner of the day care center, you may start a sole proprietorship. If you will have a partner, however, you will have to form a partnership. You may even choose to establish your business as a separate entity from yourself by forming a corporation.

Add information about managing your business. Include details about hiring and training employees. Make sure to cover the legal necessities of a daycare business, such as site safety, emergency care, staff qualifications, and other requirements in your area.

Lay Out Your Finances

Your plan should include a statement of how the business will run financially. That is, what you anticipate as your start-up and operational costs and the type of income you anticipate from the daycare's clients or from other sources of funding such as grants, donations or community assistance.

Make Your Funding Request

Determine what you will need in terms of financial assistance to get your business off the ground. Include a description of the location you've chosen for your day care center, and the equipment and furnishings you will need.

Lenders will want to review your day care business plan if you apply for a loan. Use your business plan to demonstrate how your business will stand out among your competitors, why you should run it and why now is the right time to start a day care center.

Jordan Meyers has been a writer for 13 years, specializing in businesses, educational and health topics. Meyers holds a Bachelor of Science in biology from the University of Maryland and once survived writing 500 health product descriptions in just 24 hours.

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How to Start a Profitable Child Care Business in 11 Steps!

Congratulations on taking the first step in starting your own child care business! Owning and operating a child care center is an incredibly rewarding endeavor that can provide not only a meaningful job for yourself but also give you the opportunity to help shape young lives. With the right planning and dedication, it’s possible to create a successful and profitable business. In this post, we’ll take you through 11 essential steps that will guide you through the process of starting your own child care facility. We will cover everything from understanding regulations to managing staff and even marketing your new business. So let's get started!

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11 Steps To Starting a Successful Child Care Business:

1. put together a plan for your child care business..

A business plan is crucial to the success of any child care business. It is a document that outlines a company's goals, strategy, finances, and the market they are trying to penetrate. Having an effective business plan helps entrepreneurs focus their ideas and makes it easier to understand how their business will be managed. Furthermore, a well thought-out business plan allows investors to accurately assess the risk posed by the venture and make decisions about whether or not to finance it.In the child care business, having a properly structured business plan can save time, money and stress in the long run. It helps entrepreneurs identify potential risks and develop strategies to minimize them. Additionally, it allows entrepreneurs to identify opportunities for growth or new products and services that might appeal to customers and create revenue streams for the business. Finally, having a detailed plan also helps entrepreneurs stay organized and better manage their time, as it provides a timeline for completing tasks and keeping track of progress. A properly written business plan is an essential tool for any successful child care business. Without one, entrepreneurs may be missing out on valuable opportunities and potentially running into costly mistakes down the road. Investing in the development of a comprehensive business plan upfront will lay out crucial details needed to succeed in this competitive industry and will allow your child care business thrive over time.

What does it cost to start a child care business?

Starting a successful child care business can be an expensive venture, with many expenses and costs to consider. Depending on the size and scope of your business, you may be looking at several different kinds of start-up expenses. These costs may include building or leasing a facility, purchasing equipment and supplies, hiring qualified staff members, obtaining necessary licensing and meeting any zoning requirements, marketing your services to attract customers, and purchasing additional insurance. Other costs associated with running a child care business may include:

Are child care businesses profitable?

How to come up with a name for your child care business.

Coming up with a name for your child care business can be quite challenging. You want to choose something that will be memorable, meaningful, and represent the values of your business. Consider brainstorming ideas that reflect the type of services you offer and how you want to be perceived by current and potential customers. When deciding on a name, it may be helpful to research online to make sure it hasn't already been taken. Once you have chosen a name, make sure to register it as a trademark to protect your brand.

What do you need to do to define your target audience for your child care business?

How does a child care business make money, 2. form the legal business entity..

When deciding on the right type of entity for your child care business , it's important to consider your liability exposure and your goals for the business. If you're just starting out and selling to family and friends, a sole proprietorship may be enough. But if you're looking for more protection or to grow your child care business, a corporate organization or LLC may be a better choice. Be sure to weigh the pros and cons of each type and seek professional advice if necessary.

3. Source Financing Options for Your Child Care Business.

If you're just starting out, you may only need a few hundred dollars to cover initial costs, but it's still worth considering the following financing options:

1. Raising money from friends and family:

2. bootstrapping by tapping into your own savings:, 3. sourcing investment from outside investors:, 4. obtaining a bank loan:, 5. getting funding from a hard money lender:.

By carefully considering your financing options and seeking professional advice, you can set your child care business up for success.

4. Open a Business Bank Account.

Opening a business bank account for your child care company may seem overwhelming, but it doesn't have to be. Choosing the right type of account depends on your specific needs and the amount of money you'll be depositing.

5. Set up Your Accounting and Taxes System.

There are a few different ways to establish an accounting system for your business, including using online accounting software such as QuickBooks or Xero, or hiring an accountant to handle it for you.

6. Obtain the Necessary Child Care Business Permits and Licenses.

The types of licenses and permits you need may vary depending on the location of your business, the services you offer, and the products you sell. It's important to research the requirements for your specific business and location.

What licenses and permits are needed to run a child care business?

The licenses and permits needed to run a child care business depend on the location and type of business. Typically, a business license, zoning permit, liability insurance, and food service permit are required. Additional permits may be required if the child care center is located in a state that requires fingerprinting or background checks for all employees. Additionally, if the business serves prepared meals or snacks, a food handling license will be required.

7. Purchase Equipment, Software, Supplies & Tools Needed.

List of software, tools and supplies needed to start a child care business:, 8. create a brand identity for your child care company..

But if you take the time to plan and focus on what you want your customers to feel, you can create a brand identity that will set your business apart from the rest.

1. Define your child care company's purpose and values.

2. choose a color scheme that reflects your company's personality., 3. develop a unique logo that represents your child care brand., 4. create consistent branding across all channels..

Creating a strong brand identity is essential for any child care business, but it doesn't have to be complicated. By focusing on your company's purpose and values, you can develop a brand that will resonate with your target audience. With a little planning and some creativity, you can create a brand identity that will make your child care company stand out from the rest.

9. Build a Beautiful Website for Your Business.

10. create a company email address & phone number..

Having a professional business phone number and email address is an important aspect of running a successful child care business. Not only does it give your business a more professional appearance, but it also makes it easier to stay in touch with customers and manage business communications.

By following these steps and setting up a professional phone number and email address for your business, you'll be able to communicate with customers more easily and give your business a more professional appearance. This will help you to build trust with your customers and grow your child care business over time.

11. Make a Go-To Market Launch Strategy.

Launching a new business is an exciting time, and marketing is a crucial part of getting your child care business off the ground. Here are some additional tips to improve your marketing strategy:

Resources for Your Child Care Business:

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The ultimate guide to starting a daycare business.

The Ultimate Guide to Starting a Daycare Business

Why Start a Daycare?

Advantages to starting a daycare, can you start a daycare from home, how much does it cost to start a daycare, 15 steps to starting a daycare center, resources for daycare owners, bottom line.

Since most parents work outside the home, most preschool aged children receive some form of child care. While many are cared for by nannies, babysitters or other family members, nearly one-quarter (23.4%) of children under age five attend an organized daycare center. 

This presents a world of opportunity for those looking to take the next step and start a child care business of their own. Starting a daycare center can be both personally fulfilling and financially rewarding.

Do you want to open your own daycare center in the U.S.? Follow along with this guide as we reveal the step-by-step process for opening a successful child care business. 

Opening a daycare can be intimidating, but it can also be incredibly rewarding. While there is no blueprint for success, many child care business owners find joy in the journey. So whether it’s your passion for kids or desire to serve parents in your community, there are many valid reasons to open a daycare. 

What’s important is that you also need to consider your own unique reasons for wanting to open a daycare, as these reasons will then motivate you to follow through on your dream. Even though you will face obstacles along the way, the payoff of opening a daycare is certainly worth the struggles.

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Starting your own daycare business can be advantageous on multiple levels. For one, you’ll have the personal satisfaction of starting your own care center from scratch. Then, there’s the joy of spending time with children and learning life-changing lessons along the way.

If you’re still on the fence about starting your own daycare, consider these likely advantages:

These are just a few of the many advantages of starting your own daycare center. Now let’s address some common questions you may have about being a daycare business owner. 

Yes, starting a care center from your home is an option and may even be the more affordable option. This is because there are different options at the local, state and federal level that provide grants and funding to in-home daycare centers.

If you already have the space to run a child care business out of your home, it’s worth looking into Small Business Administration (SBA) loans to help you fund your endeavor. Remember, at the end of the day, you may be eligible for tax cuts and other benefits.

According to small business website , the average startup cost for a daycare center is $10,000 to $50,000. This can vary widely depending on whether you’re opening a home-based daycare or leasing a separate facility for your care center. 

If you don’t have $10,000+ in your bank account, don’t worry. There are many grants and loans available to child care businesses. In fact, some local businesses will offer financial incentives to support budding child care centers. Consider reaching out to your community for support.

Now, let’s get to the good stuff: how to start your own daycare business from start to finish!

Starting a small business in general is always a journey. While we’ve outlined a few steps to getting your business up and running, know that there is no one “right” way to achieve success. You’ll learn many lessons along the way and are likely to pave your own path.

That said, here are 15 steps to starting your daycare center, even if you have zero experience.

1. Learn About Daycare Licensing Requirements

You might have started off as a babysitter or a nanny, but in order to start a full-on daycare business, you need to meet the proper licensing requirements in order to be legal . That way, your daycare will be legitimate and you won’t run into any legal trouble accepting children into your care. 

A good first step is to contact your state’s Department of Children and Family Services (DCFS) to learn about their specific regulations for child care providers. Another option is your local area’s child care licensing agency. You can usually find this information online. 

To obtain a license to start a daycare center, you’ll also need a current CPR certification, a clean driving record and additional documents that prove your commitment to providing quality child care. Don’t be afraid to ask your local agency questions to ensure you’re satisfying all requirements.

2. Consider Taking Early Childhood Education Classes

While you don’t need to have professional child care experience to start a daycare business, having some understanding of early childhood development is strongly encouraged. You’ll be caring for young lives, so you need to know how to provide the right kind of support and care.

Getting a degree is early childhood education is a good place to start. You can typically find classes in-person at your local community college or online. Through this degree, you’ll gain a greater understanding of how children think and behave, and what they need in order to be properly cared for. 

Beyond that, you’ll have the skills to set your business apart from your competition. You’ll be better prepared to offer the services parents are looking for and keep them coming back time and time again.

3. Create a Daycare Business Plan

In starting any type of small business, it helps to have a business plan. Having a business plan helps you set tangible goals for your business, organize your business structure, outline your services and so much more.

In your daycare business plan, you’ll define your daycare’s mission statement, operations and procedures, staffing and budget. This business plan works to keep you on track and striving toward success. 

Consider how you want your business to be organized for you plan. Will you be solo or hire staff? How will you secure funding? Will you offer services beyond child care (like tutoring)? For help in creating your business plan, check out this detailed guide from the U.S. Small Business Association .

4. Find a Location for Your Daycare

If you plan on running your daycare out of your home, this step should be pretty straightforward. If not, you’ll need to find a location for your child care facility.

Many recreational centers, churches, local businesses and even schools have space available to host a daycare, typically for a monthly fee. Search online, in your local newspaper and within your network to find options in your area. 

Once you’ve found a good fit, you need to check your city’s zoning laws and licensing guidelines to make sure your chosen location is compliant. That way you can avoid some legal headaches down the road. 

Ideally, you’ll need to find a location that’s centrally located, easily accessible and child-friendly. Consider what children and their parents will be looking for in a child care center. You might not find the perfect option, but you can make it work with a little TLC.

5. Get Insurance

Most daycare centers need several types of insurance in order to keep children (and their businesses) protected. These policies typically include liability coverage, property, workers’ compensation and business insurance.

Not sure what type of insurance you need? You can always check with your local child care provider licensing office for guidance.

6. Seek Out Grants and Funding

As we covered already, there are certainly costs associated with starting a daycare. If you don’t have the money you need to cover your initial startup costs, you’ll need to get creative when it comes to acquiring funding.

There are many grants available to help you cover your startup costs. You might also consider taking out an SBA loan or doing community fundraising. Know that the goal is to use these funds as an investment that will yield profitable returns in your business.

Costs Associated with Starting a Daycare

There are several things you’ll need to buy or lease in order to get your business up and running for day one. These expenses include but are not limited to:

You might think of some additional items you’d like to have at your daycare. Over time, you can use the revenue coming in to help cover these expenses and invest in better equipment/supplies. It’s OK to keep things simple and then scale your way up. 

7. Prepare Your Daycare Center

Once you have a location secured and the proper materials and equipment in place, it’s time to prepare your daycare center.

First, clean your facility and sanitize with an effective disinfectant. Then, take the needed steps to childproof your daycare according to the ages of the children you will be caring for. Follow this childproofing checklist for help.

Finally, set up play equipment and lay out toys. You might decide to use storage boxes to keep everything organized. You can always rearrange your layout according to your needs.

Is your daycare ready for service? Give it another once-over and you’re ready to open your doors for day one of business!

8. Draft up a Contract

As a small business owner, having a contract is always a good idea. The parents that come to your facility are essentially your clients, and you want to have a solid contract in place to protect yourself from any legal issues.

We recommend seeking out a trusted contract lawyer to draft up a contract according to your needs and unique business requirements. Your contract will then be used to outline your expectations for your clients and their children.

Here are some important questions to consider when creating your contract:

Whether you seek help from an attorney or write the contract yourself, you should have a contract in place before accepting business. Once signed, you can then send professional daycare invoices to get paid by your clients. 

9. Establish Policies and Procedures

Establish policies and procedures for the families that attend your daycare and your staff. These procedures may include an emergency plan, safety procedures, privacy protocols and rules for your facility.

Having these procedures in place will help you keep the children safe and protect yourself from liability (in some instances). In establishing your policies, be sure to review your local child care licensing requirements to ensure compliance. 

10. Research Possible Tax Credits

If you’re opening an in-home daycare, you may be eligible for certain tax reductions based on the fact that you’re using your residence for business purposes. This means you can essentially write off a portion of your housing cost. This can be the case even if your daycare space serves as a family room after hours. 

11. Hire Staff as Needed

When you’re first getting started, you may just be a company of one, as you might want to save the cost of hiring unnecessary help. But over time, you may need to hire help to take care of the kids during the day.

This is especially true if you find yourself running up against the required ratio of staff to children, as outlined in your local daycare licensing requirements. Be sure to review these to make sure you have enough staff for the number of children you plan on caring for.

Also, make sure all child care staff undergo criminal background checks and provide references to ensure the safety of the children. Make your hiring decisions carefully to keep your facility safe and maintain a stellar reputation.

12. Market Your Daycare

You have your daycare set up and open for business, now how do you get families in the door? As with any small business, you’ll need to market yourself to attract potential clients.

There are many ways to market your daycare. One method is to create flyers and post them around your local community—at businesses, schools and coffee shops. You can also run paid ads on Google or Facebook to draw in families from your local area.

To establish your daycare as a professional business, consider building a website that provides more information about your services. A basic website can cost anywhere from $10 for a WordPress template and set up, to $2,000 or more for a custom design.

With a website, you can then use search engine optimization (SEO) to attract organic traffic from Google. That way, when families search for a daycare near them, your business is likely to show up in the search results.

13. Promote Your Daycare on Social Media

Another effective marketing tool for daycare centers is social media. Platforms like Facebook, Instagram and LinkedIn can be used to promote your business and draw in potential clients.

Create a business Facebook page to post more information about your daycare, collect client testimonials and keep families up-to-date with events at your daycare. You can also post on Instagram and LinkedIn, with targeted hashtags, to attract families in your area.

As your business grows, you might decide to invest in paid marketing services. A digital marketing agency or consultant can help you increase your business’s presence online, outrank your local competitors and attract new clients. 

14. Provide Top-Quality Care

The success of your daycare depends on you providing top-quality care to your families. If the kids at your facility are properly cared for, and, even better, enjoy coming to your daycare, you’re likely to attract more referral business.

Positive reviews can work wonders to attract new clients. Ask families to review your business on Facebook, Google, Yelp and other review sites to improve your daycare’s reputation in your community.

Always look for ways to improve your daycare. Ask families for feedback, invest in additional education and hire fantastic staff to make your daycare the obvious choice for families in your area. 

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15. Manage Your Business Finances

Many small businesses fail due to poor money management. If you want your business to succeed, you’ll need at least a basic understanding of business accounting and how to manage your expenses.

Staying on top of your business finances is more than just tracking revenue in and expenses out. You’ll need to plan for taxes—typically around 30% of your revenue, after expenses—and make informed decisions when it comes to how you’re going to allocate your funds.

Professional daycare accounting software can help you send invoices, track revenue, manage expenses and more. It can even send reminders to parents for late payment and accept credit card payments with ease.

The more you know, the easier it will be to make smart financial decisions. Stay on top of your business finances so your business is not only surviving but thriving . 

Congratulations on taking the first step to starting your own daycare business—reading this guide! By now you have a general blueprint for how to start your own business and get up and running. 

Need more help getting started? Check out these reliable resources for aspiring daycare business owners:

Starting a daycare business can be challenging but also incredibly rewarding. The process is made easier by having a general roadmap for how to get started. Hopefully, this guide has provided some guidance on how to get started, plus inspiration for you to finally launch a business of your own.


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Home » Managing Your Service » 8 Steps to Starting a Preschool or Child Care Service

8 Steps to Starting a Preschool or Child Care Service

starting a preschool

Checklist to Start Your Own Early Learning Program

Are you motivated to help young children achieve their potential? Are you disappointed in the early childhood learning options in your neighborhood? Starting a preschool or child care business might be just what you, your family and your community need.

Before starting any business, you need to determine if it is right for you both personally and professionally. Here are a few items to think about.

1. Assess Your Readiness

If you are thinking about starting a preschool or child care center, you should:

Is there an opportunity? Does your community lack quality preschool and child care programs that prepare them for kindergarten and beyond? Here’s a data source on the number of kids in your area.

Childcare Aware is another great resource for information on starting a preschool or child care center.

2. A Needs Assessment & Business Plan

Once you assess your readiness and are confident in your decision to start a child care or preschool program, conduct a needs assessment for your area. Not only will the answers to the following questions help you make sure you’re planning for success, but they will also help you prepare a business plan.

Excellent sources for data to help you answer these questions include your local Child Care Resource & Referral agency, the U.S. Census Bureau and the school census from your local school district, and the Kids Count Data Center.

Use all of this research to build a business plan. Writing a business plan isn’t easy, but it’s a critical step in making sure your business starts on the right foot. From planning for startup costs and advertising to detailing how you will pay for licensing fees and salaries to developing policies and procedures, plan the launch of your business.

The Small Business Association offers excellent resources for starting a business and writing your business plan, including how to start a quality child care business.

3. Develop and Prepare Your Facility

When you are starting a preschool or child care business, you could expand or renovate an existing facility, open a small home-based program, or find a new site. Whichever option you choose, evaluate the site and neighborhood, verify with your city’s zoning laws and preschool licensing guidelines that your location is compliant, and check your state standards to learn how much space you will need based on the number of children you plan to accept.

Depending on type and size of your preschool or daycare and the state it is located in, you’ll need a different type (or types) of insurance. This will include general liability insurance, property insurance, professional liability insurance, and workers’ compensation insurance. Contact an insurance agency or your state insurance commissioner’s office for more information.

Now the fun part.

Transform your center into a place that is safe, clean, comfortable and inviting to parents and children. Purchase child-size tables and chairs, nap mats, art materials, educational toys and games, books, outdoor play equipment, and other furniture and educational supplies for your preschool or child care business. Don’t forget safety equipment such as fire extinguishers, smoke detectors and locked medicine cabinets.

4. Prepare a Curriculum

Your business plan should include a mission statement that will guide your curriculum and program philosophy.

Whether you adopt an existing pedagogy or create your own written framework, provide a learning environment that starts children down a road toward academic success and enhances their skills and knowledge.

There is a growing debate about whether the end goal of preschool should be so-called pre-academics or whether the focus should be learner dispositions . Right now, most parents think they want the former, but actually, once they hear about the value of play-based curriculum and learner dispositions many change their minds.

You also have a choice of joining a group or learning philosophy, such as Reggio Emilia . There is a lot of interest in creating outdoor environments with controlled risk-taking and other self managing ideas.

5. Staff Your Center

A preschool or early childhood learning center is only as good as its teachers. Therefore, you should be sure to hire the right personnel. Identify how many staff members you will need. It will depend on your state’s ratio requirements, the ages of the children and your approach. Seek staff who share your program’s philosophy and goals.

Consider hiring staff who surpass the minimum qualifications or are willing to undergo cardiopulmonary resuscitation, first aid and other basic safety and health training and earn the Child Development Associate credential awarded by the Council for Professional Recognition. Verify your teachers’ educational backgrounds and references, and conduct criminal background checks and fingerprinting.

In addition to hiring teachers, you might also consider hiring staff to help with everything from administration and housekeeping to cooking and transportation.

6. Select Tools and Services

There are many resources to help you when starting a preschool and run it successfully. You may need an electronic billing system and you will probably need a learning documentation and parent engagement software like Educa.

If you are not using Learning Stories, this is a time to consider them. Learning Stories are authentic assessment, documentation that engages families and makes it personal for teachers.

Educa offers software for early learning services that helps parents and teachers come together to expand and grow learning. Teachers save time by documenting learning and then sharing with parents in one click.

7. Get Quality Rating or Accreditation

Check out the QRIS (Quality Rating Improvement Systems) movement in your state, here’s a listing by state . It’s a relatively new movement, but getting a rating will help you overcome your newness. By earning a QRIS rating , you will get listed in the State register and it brings credibility. In most cases, it’s a two to three year process, but once you get started, most states will list your preschool. And parents will give you credit for being in the QRIS program.

Once you have a well-prepared and thought-out curriculum, you could seek accreditation from the National Association for the Education of Young Children ( NAEYC ). The 10 NAEYC Early Learning Standards and Criteria include relationships, curriculum, teaching, assessment of child progress, health, teachers, families, community relationships, physical environment, and leadership and management.

Only one in 10 preschools in the U.S. are accredited. It’s not an easy undertaking. However, accreditation will help show parents you are committed to providing a stellar program.

8. Market Your Program

Now it’s time to let families know about your program. Prepare marketing materials that detail your curriculum and philosophy as well as your background, and your fees and hours.

From there, develop a dynamic online presence. This is a vital step. It lets families know who you are and what is special about your business. One place to consider is Yelp. You can get a free listing, categorized by child care or preschool. Another must is a Facebook page. From there you can think about Instagram, Pinterest and Twitter.

It could also be useful, although time-consuming, to start a blog on your website. You can use it to communicate your values. And you can educate parents on the theory behind your philosophy.

Promote your preschool or child care program at schools, libraries, grocery stores, pediatrician offices, and community events. Make sure that your program is registered with the local Child Care Resource & Referral agency. Host a grand opening event to attract families and seek applicants.

Other Helpful Resources When Starting A Preschool or Child Care Center

First Children’s Finance Child Care Business Resource Center

Childcare Aware providers guide for people wanting to start a child care center or preschool

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Child Day Care Services Business Plan

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Kid's Community College

Financial plan investor-ready personnel plan .">.

Important Assumptions

The Kid’s Community College® financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions.  The monthly assumptions are included in the appendices.  From the beginning, it is recognized that total enrollment is critical, which is a factor that must be influenced immediately.  Interest rates, tax rates, and personnel burden are based on conservative assumptions. 

The most important underlying assumption is that there is a strong need for the business in the Lake St. Charles community. 

Key Financial Indicators

The following benchmark chart indicates the key financial indicators for the first three years.  We foresee a gradual growth in sales (enrollment) and operating expenses into the second and third year.

It is projected that the raw gross margin will remain stable for the first three years since expenses are relatively indirect in the service based course work industry.  Operating expenses increase gradually as enrollment increases.

Enrollment is very important.  We must maintain an average weekly enrollment of 34 students for fixed cost coverage. 

Child day care services business plan, financial plan chart image

Break-even Analysis

For the break-even analysis, start-up monthly running costs assumptions are shown in the the table below, including a three person payroll, rent, utilities and an estimation of other running costs.  Payroll, at median market averages, was presented previously in the Personnel table. 

Based on these assumptions, the chart below shows the enrollment of students per month needed to break-even.  This represents about 46% of our allowable monthly enrollment based on state and county course work guidelines.

Child day care services business plan, financial plan chart image

Projected Profit and Loss

Our projected profit and loss is shown on the following table, with sales increasing from the first year to the third. 

In years two and three, we are projecting full enrollment regarding cost of sales and gross margin.  The investment return in these years supports the goal of opening another campus at the end of the second year and begin the franchise offering by the end of the third year.  Profit from the additional campuses and income from franchising are not included in this business plan. 

The detailed monthly projections are included in the appendices. 

Child day care services business plan, financial plan chart image

Projected Cash Flow

The following cash flow projections show the annual amounts only, significant for the first year mainly in the amounts projected in cash sales and payables. 

Cash flow projections are critical to the success of Kid’s Community College®.  The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other the monthly cash balance.  The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendices. 

Child day care services business plan, financial plan chart image

Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a gradually sufficient healthy financial position.  The monthly estimates are included in the appendices.

Business Ratios

The following table shows the projected businesses ratios for our industry: Child Day Care services, SIC code 8351. Kid’s Community College® expects to maintain healthy ratios for profitability, risk, and return.

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1. Do Your Research

2. know your vision and mission, 3. what is your business about, 4. search for the right location, 5. plan for it, more design, 8+ child care contract example templates, 6+ daycare business plan examples, how to create a medical action plan examples, day care email signature designs & examples, free 73+ personal plan examples, 65+ action plan examples, 16+ child care flyer designs & examples, 13+ day care contract examples, free 10+ corrective action plan templates, 10+ best family strategic plan templates, 10+ emergency information form examples, 10+ staff development plan examples, related articles.

How to Start a Daycare Business


Do you love caring for children? Does spending your day finger painting, reading Dr. Seuss, and playing ring-around-the-rosie sound like something you’d enjoy doing? Then opening a daycare might be just the thing for you, and this guide can show you how.

To get a sense of how to start a daycare business, we talked with Lindsey Roemen, owner of Lindsey’s Family Daycare in Larchwood, Iowa, and Shalonda Owens, owner of Fruitful Trees Learning Center in Columbus, Ohio, about their experiences as daycare owners.

Lindsey says working from home and being able to stay home with your children are great perks to daycare ownership, but it also takes a special person. “You can’t go into daycare just to stay home with your kids,” she says. “You have to be a kind, patient person.”

The outlook for daycare businesses

According to the U.S. Bureau of Labor Statistics, daycare businesses will see some of the fastest employment growth out of all industries through 2020.

This means now is an excellent time for opening a daycare. An in-home daycare offers the obvious perks of working from home and spending time with your children, but even if you don’t have any little ones of your own, an in-home daycare can be a fun business for anyone who loves kids. Working parents will always need someone to look after their children, meaning a daycare business will never become obsolete. See Also:  Day Care Sample Business Plan

Should you franchise?

You can skip a lot of steps of starting a daycare by purchasing a daycare franchise. But for most people, this option is cost prohibitive: The cheapest franchises start at $59,000 and can cost up to $3 million.

This guide will focus primarily on how to start a daycare center in your own home, which has many benefits: fewer expenses, more flexible hours, and convenience. Read on to learn the ins and outs of how to open a daycare.


Step 1: Learn about licensing

The first step to starting a daycare is to contact your state Daycare Licensing Agency. “You have to call your state and see what is required of you,” says Lindsey Roemen. “Every state is different and has different guidelines. You have to weigh pros and cons and see if you can make it work in your home.”

Not all states require licenses, but you almost always need to complete a registration, depending on how many children you will be caring for.  gives a comprehensive overview of each state’s licensing requirements, so one of your first tasks will be determining what kind of licensing your state requires, and how many children you plan to care for at once. Many states only require licensing if you’re caring for five or more children, so perhaps you’ll choose to avoid the licensing process and keep your enrollment low.

“There are a lot of people who quit daycare or dropped their numbers down because they didn’t want to be registered,” Lindsey says. When you have a better idea of what your state requires, it will help you identify your own business plan.

Another consideration is your Home Owner’s Association, if you belong to one. The enrollment numbers at Shalonda Owens’ daycare, Fruitful Trees Learning Center, were limited by her HOA. “Where I live, my HOA will not allow me to have over six kids at one time,” she says.

Here are some examples of possible licensing requirements:

Once you have read the licensing requirements carefully, you might want to make an appointment with licensing specialists to ask questions and review the procedure for obtaining your license (if you need one). It might be helpful for them to visit your home, as well.

Step 2: Identify existing services

Now that you have reviewed the licensing regulations in your state and determined if starting a daycare is a feasible option for you, it’s time to look at other daycares in your area. This will be your competition and colleagues.

Compile a list of daycares in your area with the following information:

This information will make it easier for you to decide these things when opening your home daycare.

Ask yourself: Where is the gap between community need and existing services? What needs aren’t being met? If there is a saturation in your area of facilities offering full-time care for two-to-five-year-olds during traditional, weekday hours, then maybe your home daycare could offer very early morning, overnight, weekend, or evening care, or specifically care for infants up to two years old. By identifying the existing daycares in your area, you can determine what your community needs and what will make your business successful.

Where is the gap between community need and existing services? What needs aren’t being met? If there is a saturation in your area of facilities offering full-time care for two-to-five-year-olds during traditional, weekday hours, then maybe your home daycare could offer very early morning, overnight, weekend, or evening care, or specifically care for infants up to two years old. By identifying the existing daycares in your area, you can determine what your community needs, and what will make your business successful.

In addition to knowing the competition, there are other benefits to knowing the other daycare providers in your area. In Larchwood, Iowa, there are six home daycare providers including Lindsey’s, as well as a daycare center. When Lindsey had surgery, all the home providers pitched in to cover for her and take her children while she recovered. “We back up for each other,” Lindsey says. “We get together once every other week and talk about what we’re doing.”

To obtain information about other centers in your area, you can contact your county licensing office, spend some time searching online, or even just browse through the Yellow Pages.

Step 3: Create a business plan

You have a business idea and now it’s time to to turn that idea into a plan. This requires some specific decision making and research to nail down the details of your daycare.

1. Work out the logistics

Here are some logistical questions to get you started:

How many children will you care for? Many states have strict rules about the maximum number of children of certain ages allowed in a home daycare. “Start out small,” Lindsey says. “I think it’s important to get yourself used to it. If you start out smaller, you’ll be more successful.”

What is the minimum and maximum age for enrollment at your daycare? At Lindsey’s Family Daycare, the youngest child is eight weeks and the oldest is nine years. “It just seems like parents typically around 10 years old start giving them more responsibility and letting them stay home,” Lindsey says.

What time will you open your doors and what time do children need to be picked up? There are a lot of options around timing, and it’s a good idea to check out your competition before making this decision. Some non-traditional options include after-school care (this also opens up the ages of children you can accommodate to include school-age kids), drop-in or demand care, or part-time care.

Will you provide food or do children need to bring snacks and lunches? If you will provide food, check out the Child and Adult Care Food Program (CACFP),  a food cost reimbursement program available to home daycares.

Will you be hiring more staff? What about an accountant or bookkeeper? Shalonda encourages outsourcing for daycare owners when possible. “You need strong administrative skills,” she says. “I’m the type that I hire my weakness. I have a friend that helps me with newsletters and things like that.”

A lot of these answers will be provided for you by your regulations, but some of them will be entirely up to your personal preference and the limitations of your space.

2. Come up with your name and philosophy

The name of your daycare will become your brand. You may want to include your personal name, as Lindsey did with “Lindsey’s Family Daycare,” or you may want to choose something completely different, like Shalonda Owens’ “Fruitful Trees Learning Center.”

Choosing an educational philosophy might help you create a name for your daycare. There are plenty of philosophies to choose from—Montessori, Waldorf, and Reggio Emilia, to name a few. If you don’t already have experience with these, research online to find out what resonates with you. Lindsey uses a play-based philosophy at Lindsey’s Family Daycare. “I’m structured as far as when we have breakfast, lunch, snack,” she says. “But I’m a strong believer in the free childcare and letting them be themselves through free play.”

Once you have identified a philosophy and name, organize a program: times for meals, outdoor play, and naps, as well as prepared activities and lessons based on your curriculum.

3. Establish a health and safety plan

You will need to have plans for emergency evacuation, sickness prevention, and accident procedures. Many licensing departments require you to do fire and/or tornado drills regularly.

4. Draw up a contract

Create a contract for parents to review and sign when they enroll their child.

This will have information for them about payment, any additional fees for supplies or late pickup, and a sickness and inclement weather policy.

It will also request information from them, such as a child’s allergies or medical conditions, emergency contact numbers, immunization records, and a list of people who can pick them up.

This 211 Childcare website provides guidance on forming a contract and also offers a sample PDF.

5. Create a budget

A major part of any business plan is an organized, well-considered budget. “You have to be able to budget yourself,” Lindsey says. “It can get away from you. You have to be willing to treat it like a job.”

Startup costs

When starting a daycare, it is important to begin with enough money to cover your startup costs and the operational costs for at least the first 90 days. Remember, it is unlikely your daycare will start off with full enrollment, so don’t rely on enrollment fees for children unless they are already registered.

“You need to have a startup budget, but you can start up with the bare minimum,” Lindsey says.

Here are some examples of startup costs when opening a daycare:

6. Set your tuition

Another consideration in your budget is how much you will charge your clients.

One way to get an idea of how much you will charge is by referring to the information you collected on daycares in your area. Your rates will depend largely on your location; in Iowa, Lindsey Roemen charges a flat rate of $25 per child, per day, with a discounted rate of $17 per day for siblings. She and her fellow in-home daycare providers in the area try to keep their rates the same.

Shalonda Owens has a more complicated system for fees at her in-home daycare in Ohio. Her weekly rates are $160 for infants (six weeks to 12 months), $150 for “early toddlers” (13 months to 23 months), $145 for two-year-olds, and $135 for preschoolers (three to five years old). Before and after school care is $7/hour.

Another factor to consider is how and when you will accept payment. You’ll also need to establish a deadline for payment and penalties for late payments. Lindsey’s clients write her a check every Thursday at pickup, and Owen’s clients pay every Monday at drop off. In addition to tuition, many daycares charge a one-time enrollment fee to cover the extra time and paperwork you will need for each new child.

Include anticipated tuition in your projected income for your budget, but don’t rely heavily on it. “You have to be wise in your spending,” says Shalonda. “There are times where your enrollment may decrease and you have to be able to manage things for a long period a time.”

7. Determine where you’ll get your funding

Luckily, for an in-home daycare, it is likely that your startup costs will be low. But should you find yourself needing some startup cash, here are your options:

Private: Ideally, your startup costs can be covered by your own funds or that of a friend or family member. This reduces the time you will spend looking for additional funding and there are no finance charges.

Commercial: Commercial banks offer short-term and long-term business loans at prevailing interest rates.

Government agencies: Contact your Small Business Administration office for information on federal loan programs or your state’s economic development office for information on state loans and grant programs.

Tax credits: There are several home business tax write-offs that can offset your expenses when you are running a daycare from your home. This includes 100 percent deductible expenses like food, toys, and equipment, as well as partially deductible expenses like home insurance and utilities. The IRS has a guide for figuring and claiming the tax deduction for business use of your home. See Also:  Child Care Business Sample Business Plan

Step 4: Get set up

Now that you have a plan, it’s time to set the wheels in motion.

Choose your location

Picking the location for your daycare may be necessary if you don’t plan to run it out of your home. For more information on picking your business location, check out our article, How to Choose Your Business Location.

Purchase equipment

Purchase any equipment needed for your daycare. In addition to toys, you may need sheets, mats, blankets, child-sized utensils, plates and cups, high chairs, step stools and booster seats. has an exhaustive list of child care equipment and materials that you can consult.

Purchase insurance

Insurance is vitally important when starting a daycare. You need property insurance to cover your business equipment and liability coverage in case you are sued. For help finding an agent and purchasing insurance, contact your State Insurance Department.

Step 5: Market your daycare

For both Lindsey Roemen and Shalonda Owens, marketing was never a part of the process of opening a daycare. Word of mouth filled up their enrollment numbers and waitlist so quickly that they never had to market. The same might be true for you, but if not, marketing is an important step for ensuring your home daycare thrives.

Here are some questions that can help you identify your client base and how to reach them:

You gathered a lot of this information earlier when first formatting your business plan; now, you can use it to help you target your marketing. Put up fliers in your community, create social media pages (Twitter, Facebook, LinkedIn) and be sure to include testimonials from previous clients whose children you have cared for. Recommendations inspire trust in potential clients.

Once your daycare is operational, continue to seek out accreditations like the National Association for the Education of Young Children (NAEYC) or National Association for Family Childcare and other professional development opportunities to improve your knowledge base and your reputation as a child care provider.

Be sure to continue collecting feedback from your clients. Use the positive reactions in your marketing and handle any criticisms swiftly and professionally. With the proper foundation for your home daycare, you are sure to have more positive feedback than negative.

AvatarEmma Castleberry

Emma Castleberry

Emma is a freelance writer and media specialist with a passion for crafting in-depth, human interest articles. She likes spending all of her money on travel, eating cheeseburgers and ice cream, and dancing with abandon.

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How to create a daycare business plan.

How to Create a Daycare Business Plan When Starting a Daycare Business

A daycare business offers the perfect opportunity for an entrepreneur. That’s especially true if you love caring for children. There are franchise opportunities available for child care businesses . Or you could start your own from the ground up. You can focus on a specific niche or age group. Or accommodate a wide array of families. But before taking any of those routes, you need a daycare business plan.

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What Needs to Be in a Daycare Business Plan?

General overview, target customers, market analysis.

Once you have an idea who you’re targeting, it’s important to look at what other companies serve those customers and what the general market looks like in your area. This section should examine your competition and the major players in your industry. And it should also examine the size of your potential customer base. This should help you really nail down where you fit into the picture and make sure that there are enough families in your community who are looking for what you have to offer.

Marketing Objectives

Legal structure.

This section is essential for business plans in any industry. This should explain the legal structure of your business, whether its a corporation, LLC or partnership. You also need to work with your state’s Department of Education to make sure you have all the proper licenses to operate a child care center. And lay out all of those details in your business plan so any potential investors or partners know that you have your bases covered.

Financial Details

Find your location. Get your team and other details nailed down. Then you should have a pretty good idea about the operating expenses of your center. This section is where you lay out those expenses. The money you expect to bring in is based on projected enrollment. Do you plan to seek funding from outside sources? This is also where you should include exactly what you’re looking for. And what that funding will go toward.

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Daycare, Camps, and Recreational Programs

how to create a business plan for a daycare center

Children with diabetes sometimes face problems participating in child care, camps, and recreational programs such as sports leagues. It's important to understand the legal protections available so that you can be an effective advocate for your child. The Association's position statement  Care of Young Children With Diabetes in the Child Care Setting  and child care brochure,  Children with Diabetes & the Childcare Setting  (also available en Español ), helps parents and guardians to understand legal protections in the child care setting. Our  child care tip sheet  can help parents and guardians secure a safe and healthy child care environment for very young children with diabetes.

Training resources

Once you are familiar with the laws that protect your child from discrimination, you'll want to know what resources are available to help you secure diabetes care at daycare, camp, and recreational programs. The Association has developed  training resources  for the school setting that can also be used in the daycare, camp, or recreational program setting. You will also want to know how to create a written care plan, which can be modeled on our sample written school care plans such as the  Diabetes Medical Management Plan (DMMP) , and the  Child Care DMMP for younger children in a child care setting. A written plan helps everyone involved with your child's care understand diabetes and their responsibilities.

Resolving challenges

Do you want tips on how to advocate for your child? Often, questions and concerns that arise in the daycare, camp, and recreational programs setting also arise in the school setting. Some of the strategies developed through the Association's Safe at School Campaign can be adapted to resolve challenges in the daycare, camp, and recreational programs setting but keep in mind that the law may not apply in the same way. Read more about resolving challenges and learn about  how you can get help from the ADA  with a discrimination issue in daycare, camp or recreational programs. 

Diabetes litigation: Daycare and camps

Daycare centers, camps, and other recreational programs covered by the ADA and/or Section 504 cannot refuse to admit a child because he/she has diabetes, and may be required to provide services, called accommodations, to a child with diabetes to enable to child to participate in the program.

Legal protections in daycare, camps, and recreational programs

Children with diabetes have the right to the same opportunities to attend daycare, go to camp, and participate in community activities as any other child.

Daycare, camps, and recreational programs: State laws and regulations

Even though federal laws provide protection for children with disabilities, state law often impacts whether non-nursing staff at a daycare or other programs can provide insulin injections and emergency glucagon injections.

Child Care Licensing

Program mission.

The core mission of the Child Care Licensing Program is to ensure the health and safety of children in care. The Child Care Licensing Program strives to provide preventive, protective, and quality services to children in care by ensuring that licensed facilities meet established health and safety standards through monitoring facilities, providing technical assistance, and establishing partnerships with providers, parents, and the child care community.

The Child Care Licensing Program provides oversight and enforcement for licensed Child Care Centers and Family Child Care Homes through 19 Regional Offices located throughout California. All children and families, regardless of age, ethnicity, cultural background, gender, socioeconomic status, or ability, are afforded the same protections under law and regulations for child care facilities.

Questions regarding the Program can be directed to your local Regional Office , the Child Care Advocate Program (916-654-1541), or the Centralized Complaint and Information Bureau .

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Developing an Urgent Care Business Plan: A Model for Success

The urgent care industry is booming —driven by a new breed of healthcare consumers that wants affordable and accessible medical care that fits into their on-demand lifestyles. There are several factors fueling this trend —long waiting times at primary care physicians and emergency rooms, the lack of after-hours care, and cost-effective healthcare services. According to the Urgent Care Association , the total number of centers had reached 9,616 as of November 2019, a 9.6 percent jump from the previous year.

It’s also not surprising that many entrepreneurs are interested in opening an urgent-care clinic. You may be one of them. Whether you are planning to open an independent business, purchase an existing business, or invest in a franchise, one of the most important steps is building a strong business plan.

Without a plan, a business is more likely to fail. In fact, studies have shown that companies that follow a business plan grow 30 percent faster than those that don’t

A business plan is a blueprint for helping you effectively build your business and manage risk along the way. It describes all aspects of your urgent care center, including an overview of the business, services provided, marketing strategy, management structure, and —arguably the most fundamental part of any business plan —financial projections.

Financial history is usually unavailable when starting a new business, so you must provide more extensive details about what industry research and market analysis you have done to effectively create your profit and loss projections. Providing this information will allow those interested in your business, such as an investor or lenders, to fully understand your plan and its viability. You need to show that your urgent care business can realistically generate enough revenue to cover your operating expenses and pay back your loans.

You can start creating the master plan for your urgent care by including the following seven sections:

1. Executive Summary

This section summarizes your entire proposal in one to two pages. It’s an overview of the most important points covered in your business proposal. The executive summary makes it quick and easy for your potential client to gain insight into what you are offering them and why it will benefit them to do business with you.

2. Company Summary

This section describes the organizational structure of your business and who the key players are. The company summary will include information about when the company was founded, name(s) of the company’s owner(s), and any other legal information, such as entities associated with the company or date of incorporation.

3. Business Description

Here, you outline your services and how they differ from competitors. Go into detail about the need your business fulfills. Explain the competitive advantages that will make your business a success. The business description is the place to boast about your strengths.

4. Market Analysis

You will need to provide an overview of your target customer demographics, competitors in the urgent care space, and potential for market growth.

5. Sales and Marketing

How you will drive customers to your urgent care as well as retain them? This is the section where you explain how you plan to get the word out about your new location and the types of ongoing advertising campaigns you will provide.

6. Management Summary

In this section, you establish the key members of your management team who will be an integral part of the day-to-day operations. Consider including the professional highlights of key members of your team and highlight how each person’s unique experience will contribute to the success of your venture.

Funding and Finances

This section of your business plan is arguably the most important. To start, you will need to create and provide forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. The financial predictions you put together will be an invaluable tool for you to measure the financial health of your business.

If you plan to finance any part of your urgent care business, you will also use the financial predictions you build to show potential lenders that the industry is stable and the odds that the business will succeed are greater than the risk that it will fail.

In addition to providing revenue predictions, you will also need to map out all your projected expenses. Calculating expected profits and losses (P&L) will help you determine your funding requirements for the next five years. It will be important to provide potential lenders or investors with a detailed description of how you’ll use your funds, including fixed and variable costs.

Fixed costs include initial investment expenditures like build-out costs, furniture, fixtures, and equipment, plus fixed monthly payments like rent and utilities. Variable costs include things like a marketing budget, product purchases (inventory), and payroll.

Because a business plan projects your company’s growth in the next three to five years, you should refer back to this document frequently and continue updating it as you gain more information about how your business is growing and where you see outgoing.

7. Franchising and Business Plans

The quicker your urgent care is up and running, the quicker you can begin earning profits. Choosing to go with an established franchise, like American Family Care, could make your ownership goals an easier reality. You still need a business plan, however. Franchising makes creating that plan easier, too.

A major upside of investing in a franchise instead of starting a business on your own is that working with a franchisor helps take a lot of guesswork out of building a strong, reliable business plan.

The Federal Trade Commission (FTC) requires all franchisors to provide prospective franchisees with an updated Franchise Disclosure Document (FDD) . All FDDs must include estimated initial investment costs, as well as recurring costs. Some FDDs may also include revenue projections, but franchisors are not legally required to do so.

FDDs can be incredibly useful when starting to build your business plan, but be sure to ask the franchise representative you are working with any questions regarding the numbers; or any other items in the FDD. Additionally, make sure you confirm your understanding and assumptions with existing franchisees during the validation process.

8. About American Family Care

American Family Care is the original urgent care franchise, and its founder, Dr. Bruce Irwin, is an industry pioneer. After more than four decades in franchising, AFC operates more than 200 clinics with 600 in-network physicians caring for nearly 3 million patients a year. AFC is the nation’s leading provider of urgent care , accessible primary care, and occupational medicine. Ranked by Inc. magazine as one of the fastest-growing companies in the U.S., AFC’s stated mission is to provide the best healthcare possible, in a kind and caring environment, while respecting the rights of all patients, in an economical manner, at times and locations convenient to the patient.

Click here to learn more about urgent care franchise opportunities with American Family Care or request more information.


Complete the form for a free brochure and we will be in touch., get started.

By requesting information, you agree that American Family Care may call and/or text you about your inquiry, which may involve the use of automated means. You do not need to consent as a condition of any purchase, and you can revoke consent at any time. You also agree to our Privacy Policy.

This advertisement is not an offer to sell a franchise. Any offer to sell this franchise will be made by a Franchise Disclosure Document and only following registration by AFC Urgent Care in any state requiring registration prior to sale.

In New York: This advertisement is not an offering. An offering can only be made by prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law.

In California: These franchises have been registered under franchise investment law of the State of California. Such registration does not constitute approval, recommendation or endorsement by the Commissioner of business oversight nor a finding by the commissioner that the information provided herein is true, complete and not misleading.

Franchise Opportunity

Available markets, let's find an open market near you..

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Get Started on Your Journey to Owning an AFC Healthcare Center.


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