Daycare Business Plan Template
Business Plan Outline
- Daycare Business Plan Home
- 1. Executive Summary
- 2. Company Overview
- 3. Industry Analysis
- 4. Customer Analysis
- 5. Competitive Analysis
- 6. Marketing Plan
- 7. Operations Plan
- 8. Management Team
- 9. Financial Plan
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:
- Executive Summary – This is a brief overview of your daycare business plan. The executive summary should be no more than 2 pages long, with brief summaries of other sections of the plan.
- Company Overview – This is where you provide a business description, including your company history, business structure, and any pertinent information about the daycare center.
- Industry Analysis – The industry analysis describes the daycare industry, including market size and trends.
- Customer Analysis – This section of your daycare business plan describes your target market and potential customers. You will detail the demographics, needs, and wants of your target audience and how you plan to meet those needs.
- Competitive Analysis – The competition in your local area will be described here, along with how your daycare business will compete in the market.
- Marketing Plan – Your marketing plan will describe your daycare’s marketing strategy, including your advertising and promotion plans.
- Operations Plan – This section of your business plan describes how your daycare will be operated on a day-to-day basis. It may also include your long-term plans for expansion and the milestones you want to achieve to get there.
- Management Team – The management team section of your business plan should describe the experience and qualifications of your management team including the director, teachers, and support staff.
- Financial Plan – The financial plan section of your daycare business plan should include your financial statements, such as your income statement, balance sheet, and cash flow statement.
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:
- How to Start a Daycare Business
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Child Care Business Plan Template
Download our Child Care Business Plan Template here
What Is a Business Plan?
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.
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:
- Home-Based Child Care: this type of child care business operates out of your home and typically has one or two caregivers on staff.
- Child Care Center: a child care center operates out of a commercial building. It typically has multiple staff and caregivers and can serve many, many children.
- Pre-School Child Care: a child care business that primarily serves preschoolers
- School-Age Child Care: a child care business that primarily serves school-age children.
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:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new program offerings, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
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:
- How big is the child care business (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the local or national market?
- What trends are affecting the child care industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your child care. You can extrapolate such as figure by assessing the size of the market in the entire country and then applying that figure to your local population.
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:
- What types of customers do they serve?
- What child care services do they offer?
- What times are they open?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
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:
- Will you provide superior child care services?
- Will you provide child care services that your competitors don’t offer?
- Will you offer better pricing?
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:
- Social media marketing
- Reaching out to local bloggers (particularly “mommy” bloggers) and websites
- Local radio advertising
- Banner ads at local venues
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.
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.
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:
- Child care center build-out including design fees, construction, etc.
- Cost of fixtures like tables, chairs, couches, etc.
- Cost of equipment used like computers and televisions
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
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.
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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.
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Mountain Brook Fitness Center is a fitness center where parents can bring children to be taken care of while they do whatever exercise activity they desire.
You know how important it is to plan activities for the kids at your day care? It's just as important to plan for the financial future of your business. These sample business plans for day care centers will help you write a business plan for your business.
If you’re looking to develop a more modern business plan, we recommend you try LivePlan . It contains the same templates and information you see here, but with additional guidance to help you develop the perfect plan.
Plan, fund, and grow.
Easily write a business plan, secure funding, and gain insights.
Achieve your business funding goals with a proven plan format.
What if Starting a Daycare was Easier Than You Ever Imagined?
It all starts with creating a good daycare business plan. With the right plan in place, opening a daycare has never been easier!
Our comprehensive guide will walk you through creating a business plan . At the end, be sure to download our daycare business plan template and hit the ground running!
The actual daycare business plan may look pretty long once you have everything filled out. To make things easier for everyone from the bank to your employees though, you should begin with an executive summary.
An executive summary provides key info, including business address, phone number, and who to contact. It will also outline the business structure, the list of owners, banking info, and the anticipated start date for your daycare.
The summary should also include a snapshot of your business concept, a description of daily business, and a rundown of your employees. Finally, it should include who your client base is, what your market niche is, and what factors make your success very likely.
Our guide will take you on a deeper dive into some of these different parts of the summary, and you can always work with an outside child care consultant to get things "just right." But it's important that your executive summary provide all of this key info at a glance.
One of the biggest decisions to make is where you will open a daycare. You must decide whether to run the daycare out of your home or run a group child care center . Child Care Biz Help works mainly with existing and start-up group child care centers.
Provided that you have enough room, using your home for the daycare business helps to cut down on costs, but keep in mind home daycares limit the number of children that you can care for, which ultimately restricts the amount of revenue you can earn.
When choosing a group child care center, you have several options:
- New building
- Existing center
Whichever options you choose, make sure you know how much everything will cost. This is vital info for your business plan, especially when you get financing.
The business plan should include as much info about your employees as you have. It's true that you may not know everything about everyone you plan to hire, but any info that you already have should go in the plan.
For example, the plan should include the overall number of employees you plan to have. Furthermore, it should outline the exact responsibilities that each person has so that it's clear who the owners are, who the director and teachers are, and who the other support staff is.
Regarding your management team, the business plan should include their relevant background and experiences. And you can use this section to outline some of the ways that you might screen applicants (such as criminal background checks, letters of reference, and personal interviews).
Again, you may make personnel changes over time. But the stronger your first set of employees is, the easier it will be to get this business off the ground!
Let's face it: there are plenty of daycares out there. And all of the daycares in your area are now your competition. That's why your business plan should include info about your specific market niche.
Will you specialize in attending to the needs of a particular set of children? Or will your teachers embrace a specific teaching style such as the Montessori Method ?
There is plenty of room to get creative here. After all, chances are you want to open a daycare because you can do it better than other people. This is simply the section to explain why your business will be the best!
Finances play multiple roles in your daycare business plan. But the first area occurs right after your executive summary. This is where you lay out all of the relevant financial details in one place.
The info should include how much your daycare equipment will cost, how much your furnishings will cost, and how much transportation will cost. You will also need to provide info about how much operating capital you currently have and how much your intended renovations are going to cost.
Make sure this section is accurate so that you can get all of the money that your business will need!
The business plan should include an operational plan section. This is where you go on to outline specific individuals as well as their titles, responsibilities, qualifications, and payscale. Keep in mind the center director position is one of the most important positions to hire for. Find out more on how to hire and onboard an exceptional child care director here .
This is also a good section to outline the value of your project. Here, you provide an itemized list of different things (like the plumbing, drywall, and electrical) and how much they cost. Do the same thing with any machinery, equipment and furniture. Don't forget to include any playground costs which can be very significant when you're a new start-up.
Finally, this section should include a description of your business operations. Be sure to include the "little things" (like creating daily schedules and installing equipment) as well as the "big things" (teaching children of a certain age range, following health and safety guidelines, etc.).
It's one thing to have a great business and it's another thing for people to know you have a great business. That's why every good business plan should include a marketing plan .
In this section, you should be specific about who your primary target audience is and what communities they live in. Provide very specific demographic data before you pivot into the marketing strategy.
That strategy should include any combination of traditional and digital marketing methods. This might range from newspaper and radio advertisements to social media and SEO campaigns .
Over time, you will discover which marketing methods are better than others. But this section should include every marketing method that you plan to try.
Most people plan to start a daycare because they want to give back to the community in some way. With that in mind, the purpose of any business is to generate profit. And your business plan must include info about the different revenue opportunities of your business.
The most basic form of revenue will come from the weekly or monthly enrollment fees for taking care of children. You can simply calculate the anticipated number of children (and their age ranges) with your rate in order to calculate an approximate monthly revenue.
In addition to that, you might consider adding enrichment programs and registration fees as revenue opportunities. It's all a matter of finding a balance between a quality program and a program parents can easily afford.
The business plan should include a section for the purpose of your loan. In this section, you will identify, down to the dollar, what your intended loan needs to cover.
This should be an itemized section so that the lender knows how much is going towards renovations, furniture, equipment. And you should use this section to reiterate what your current operating capital is.
When the smoke clears, we should have a clear idea of the project cost, your equity and contributions, and what the total financing required will be. Without this info in place, it's impossible to get your business off the ground.
What is a lender's primary consideration when a business needs money? Simple: they want to know the business will succeed. That's why your business feasibility section is so important.
At the bare minimum, this section should include research data about which factors will make your daycare in this area successful. If you have any feasibility studies or other intensive research you can cite, this is the section for it.
Ideally, this section should also include a full-blown SWOT analysis . This shows lenders and investors that you have a keen understanding of what your business does well and what it might need to work on.
Finally, this section should include your long-term plans. Outlining how you plan to grow and adapt your business helps reassure lenders and investors that you are prepared for the future.
The final section is straightforward and to the point. This is where you attach the financial projections you have completed for your business.
We recommend including cash flow projections for the first twelve months and cash flow projections for the first three years. On top of that, you should include three years of projected income statements and balance sheets.
Obviously, much can change in the space of three years. But healthy financial projections for the next few years are a great way to win skeptical audiences over.
Download >> Daycare Business Plan [Template]
Now you know how to create a daycare business plan. But do you know who can make it nice and easy?
All you need to do is complete the form below to download our daycare business plan template. And for more tips about opening a daycare or if you're interested in hiring us to help, contact us today !
UPDATE > New Video Course on HOW TO START A DAYCARE
NEW >> we just launched our new in-depth video course on How to Start a Daycare. There are 24 lessons, with several downloadable assets - over 2.5 hours of how to start a daycare course content that will set you up for success in the child care industry. One of the videos takes a deep dive into what is needed in a quality daycare business plan. Go check it out now!
TurnKey : Child Care Biz In A Box - This solution provides the strategic plan, hundreds of brandable documents (ie - handbook, checklists, procedures, and more), and the support system needed to start a commercial group child care center - WITHOUT the franchise fees! Get started today!
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NOMINATION GUIDELINES AND ELIGIBILITY
The Navigator awards program is open to all child care centers (family, group, large, small, profit and non-profit). Any person, group, or organization may turn in their submissions online. Submissions may be self-nominations or nominations on behalf of another organization. May originate from any country.
Nomination audience to include other ECE service providers (nominate a client).
DEADLINE DATES
Date to submit by: October 2, 2022
- Date winner will be picked and announced live online: November 18, 2022
NOMINATION GUIDELINES AND ELIGIBILITY
Complete the online form and select the award you are applying for.
If you are nominating someone, please make sure to note that on the nomination form.
All applications must answer the following (up to 350 words):
- Provide a brief description / background of your nominated organizational, departmental, team, or individual circumstance.
- Outline your nominated organizational, departmental, team, or individual achievements, within the last 12 months, based on your selected categories.
- Provide examples of the strategies / plans you have introduced, milestones achieved, creative methods of implementation, etc. Explain why the highlighted achievements are significant / unique.
- Please provide the names of individuals (including yourself) who were involved.
Upon submission of the online form, the nominator will receive a confirmation email.
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The World's Leading Business Plan Template Directory
Daycare Business Plan Template [Updated 2023]
Daycare business plan template.
If you want to start a daycare business or expand your current daycare or child care business, you need a business plan.
The following daycare business plan template gives you the key elements to include in a winning daycare or child care business plan.
You can download our Daycare business plan template (including a full, customizable financial model) to your computer here.
Daycare Business Plan Example
Below are links to each of the key sections of a daycare business plan example:
I. Executive Summary
II. Company Overview
III. Industry Analysis
IV. Customer Analysis
V. Competitive Analysis
VI. Marketing Plan
VII. Operations Plan
VIII. Management Team
IX. Financial Plan
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Daycare Business Plan Outline
The Daycare Business Plan Blueprint (Examples + Template)
April 14, 2022
Adam Hoeksema
Starting a daycare business can be a daunting task. There are so many things to think about and plan for. You need to find the perfect location, get the right licenses and permits, hire qualified staff, and, most importantly, create a daycare business plan.
Creating a daycare business plan is one of the most important steps in starting your business. A well-thought-out business plan will help you get funding, attract investors, and operate your business effectively.
The bad news is that there is a lot of advice out there on writing a business plan. With so much information and tons of daycare business plan examples to choose from, it can be overwhelming to know where to start.
The good news is, we've got you covered. In this article, we'll give you a comprehensive guide on how to write a daycare business plan. We will also provide some examples and a free daycare business plan template to get you started.
But First...Is a Daycare a Good Business to Start?
Before we talk about how to create a daycare business plan, let's first answer the question: is starting a daycare a good business to get into?
The answer is a resounding yes! The daycare industry is growing rapidly. It is one of the few businesses that are not only recession-proof but also thrives in uncertain economic times.
According to the National Association of Child Care Resource & Referral Agencies (NACCRRA), the demand for child care services has increased by 26% over the last decade. This demand is only expected to grow in the coming years.
When it comes to profitability, the daycare industry is very attractive. According to IBISWorld , the average profit margin for a daycare business is around 15%. That's higher than the average for most other industries!
If you're thinking about starting a daycare business, know that you are getting into a very profitable and in-demand industry. Now let's talk about how to write a daycare business plan that will help you start and grow your business successfully.
How to Create a Daycare Business Plan
A daycare business plan is as simple as a word document with the following sections:
- Business Description
- Market Analysis
Business Model
- Location and Facility
- Marketing Plan
- Financial Plan
Executive Summary
This article will provide context of what to include in each section of your daycare business plan. As you work on writing your business plan, you will want to grab our daycare financial projection template as well in order to complete the financial plan section.
Your daycare business plan should be an elevator pitch in itself. It should be attractive to potential partners and investors. Basically, it should give them a clear idea of your business, where it is located, what services you offer, who your target market is, and how you plan to make money.
Creating a daycare business plan doesn't have to be complicated. In fact, the cheapest and easiest approach is to simply start with a blank word document and work through each of the above sections, it can be pretty easy. Here is a step-by-step guide on how to create a daycare business plan:
Create a Compelling Business Description
Your daycare business's unique selling point (USP) should be the first thing you include in your business plan. What is it that makes your daycare center different from all the others?
This description should be the foundation of your marketing efforts as well.
There are a few questions you should answer in your company description. They include:
What's your Curriculum Based On?
Potential investors, partners, and even customers will be interested in knowing what your curriculum is based on. This will help them understand the environment children will be in a while under your care.
When describing your curriculum, make sure to include:
- What age ranges do you cater for?
- The type of care you offer (full-time, part-time, drop-in)
- Your educational philosophy
- The activities and programs you offer
For example, if your daycare is unique by offering a Montessori curriculum, you will want to highlight that. In fact, you can learn more about how to start a Montessori program here .
How Big is Your Facility?
The size of your facility will say a lot about the type of operation you're running. Are you a small, home-based daycare or a large center with multiple classrooms?
This section of your business plan may include:
- A floor plan of your facility
- The capacity of your facility
- The number of employees you have
- Type of equipment and furniture you have
Who Is Your Target Market?
You can't market to everyone, so you must identify your target market. This will help you focus your marketing efforts and ensure that you're reaching the right people.
Below is a daycare business plan example that shows how your business description should be:
“ABC Daycare is a small, home-based daycare located in San Francisco, CA. We cater to children aged 0-12 years old and offer full-time, part-time, and drop-in care.
Our curriculum is based on the Reggio Emilia approach, emphasizing hands-on learning and collaboration. Activities and programs include arts and crafts, music, and outdoor play.
Our facility can accommodate up to 12 children at a time. We have a staff of four employees who are all CPR and First Aid certified.
Our target market is working parents in the city who need quality child care but can't afford the rates of larger daycare centers. We've created an affordable subscription-based pricing model for our target market to fulfill the demand. We generate revenue through monthly subscriptions and have low operating costs due to our small size.
Our suppliers are local businesses that provide us with food, toys, and other supplies.”
Do a Thorough Market Analysis
After writing a compelling description of your business, you need to do a thorough marketing analysis. This analysis will help you determine your target market, what type of advertising and promotion will work best, and how to price your services.
You should also research the competition and see what they are doing right and wrong. This information will be invaluable as you create your daycare business plan.
Keep these things in mind when doing a market analysis:
The Size of Your Market
This is determined by the number of potential customers in your area who need or want your services.
For example, if you live in a small town with only a few thousand people, there may not be enough demand to support a large daycare facility.
On the other hand, if you live in a city with hundreds of thousands of people, there may be room for multiple daycare facilities.
Your target market is the segment of the population that is most likely to use your services. This includes factors like age, income, education, and location.
After you've identified your target market, you need to show how you plan on fulfilling the demand. This is where your business model comes in.
Your business model is a detailed description of how your daycare will operate daily. It should include:
- How do you plan on acquiring customers?
- What are your pricing strategies?
- How will you generate revenue?
- What are your operating costs?
- Who are your suppliers?
Your business model should be detailed and easy to understand. It should also be realistic and achievable.
Here is a daycare business plan example of a business model for a small daycare center:
“The daycare will be open Monday through Friday from six in the morning to six at night. We will offer care for children ages six weeks to twelve years old.
Our rates will be $50 per week for one child and $40 per week for each additional child from the same family. We will offer a discount of $20 per week for families who enroll their children for an entire year.
We will generate revenue by charging weekly rates for our services. Our operating costs will include rent, utilities, supplies, and salaries for our employees. Also, we will acquire customers through online advertising and word-of-mouth.”
As you can see, a business model is a detailed description of how your business will operate. It's essential to have one in place before promoting and selling your services.
One thing you should not forget to include in your daycare business plan is the location of your business and your rental agreement. If you are renting a space, including the terms of your agreement and how long you have the space. If you are purchasing a property, include information on the property, such as square footage and any special features that will help your business stand out.
This daycare business plan example shows you how to include this vital information:
“The daycare will be located at 123 Main Street in a commercial space currently leased by the owner. The lease agreement is for three years with an option to renew for an additional three years. The monthly rent is $2000, and the security deposit is $3000.
The daycare will have exclusive use of the main floor, including a large open play area, a small kitchen, two bathrooms, and four classrooms. The daycare will also have access to the outdoor playground.
80% of our space will be used for childcare, with the other 20% used for our administrative offices and staff lounge.
We have chosen this location because it is close to several residential neighborhoods and has easy access to public transportation. The space is also large enough to accommodate our future growth.”
There are many daycare business plan templates you can use to help you get started. This is a basic outline of what should be included.
Daycare Marketing Plan
Most daycare business plan templates will include a section for your marketing plan. Most people overlook the marketing aspect of their business, but it is one of the most important pieces of your puzzle.
In your business plan, you need to outline your target market, your marketing strategies, and how you plan on executing those strategies.
You also need to set aside a budget for your marketing efforts. Many people make the mistake of thinking that they don't need to spend money on marketing, but that couldn't be further from the truth.
The following daycare business plan example shows you how you should describe your marketing efforts:
"Our target market is working for families with children between six weeks and five years old. We will reach our target market through online and offline marketing efforts.
Some of the offline marketing strategies we will use include print advertising, flyers, and word-of-mouth referrals. We will use a mix of SEO, content marketing, and social media for online marketing.
We have set aside a budget of $500 per month for our marketing efforts."
As you can see from the example above, your marketing plan should be clear, concise, and to the point. Don't forget to include a budget!
Daycare Financial Plan
Your business plan should include a financial plan section. This is where you'll lay out how much money you need to start or grow your business. Be specific and include dollar amounts. If you're seeking a loan, including information on how much you're requesting and how you'll use the funds.
You should also include a detailed budget in your business plan. Your budget should include all of your projected income and expenses for at least the first year of operation. Creating a budget will help you get a clear picture of what it will cost to start and operate your business.
This section should include projected costs for:
- Rent or mortgage payments
- Advertising and marketing
- Operating expenses such as utilities, supplies, and more.
Startup costs are another vital item to include in your business plan. This is the money you need to purchase equipment, furniture, or any other items to get your business up and running.
If you plan to secure a loan, your lender will want to see a detailed business plan with information on how you plan to use the loan funds. Ensure you include this information in your business plan to increase your chances of securing funding.
If you're seeking funding from investors, you'll need to include information on how they will be compensated. This is typically done through equity, a percentage ownership stake in your business.
For example, if you seek $100,000 in funding and offer a 20% equity stake, the investor will own 20% of your business.
Make sure you use a daycare business plan template that includes a section on funding to ensure you include all the necessary information. If you’re planning to get a loan or seek investment, you’re going to need full financial projections. Our daycare financial model will provide up to 5 years of projected income statements, cash flow and balance sheet forecasts.
Next I want to answer some key financial questions for you as you consider how to forecast your daycare financials. I am going to hit on:
- Daycare Startup Costs
- Daycare Revenue
- Daycare Facility Operating Expenses
- Daycare Profitability
Let’s dive into some key questions.
How much does it cost to start a daycare?
It costs between $10,000 and $50,000 to start an in-home daycare business according to Bizfluent .
It costs between $59,000 and $3 million dollars to start a daycare facility according to Bizfluent .
So obviously this is a huge range in startup costs. The main thing that will determine your startup costs is your daycare facility. Depending on how large your daycare is, whether you are buying, building, or leasing the space, and how much renovation needs to be done, your startup costs can vary drastically.
Some tips to help you estimate a cost of a daycare facility:
- A daycare facility should have 35 square feet of open floor space indoors per child.
- So if you wanted a facility that could care for 100 children you would need 3,500 square feet of indoor space for children, plus additional space for offices, kitchen, bathrooms, etc. Let’s assume that you would need at least 5,000 square feet of space for a daycare facility that served 100 children.
- A daycare center would cost at least $295 per square foot to construct in the U.S. based on data from Levelset .
- Constructing a new 5,000 square foot daycare center would likely cost at least $1,475,000 based on $295 per square foot.
- Now you might not be constructing new, rather you might rent an existing facility which could require renovations. You will need to get a specific quote for the specific renovations that you need for your space.
Download the Daycare 5 year financial projection template
How much revenue can a daycare business make.
A daycare facility can generate $17,680 in revenue per year per child according to Zippia .
A daycare business with 100 children can generate over $1.75 million per year in annual revenue based on our average revenue per child of $17,680.
How much does daycare cost?
The average cost of daycare is $17,680 per year, per child in the U.S. according to Zippia .
This means that the average monthly cost of daycare in the U.S. is roughly $1,475.
What is the typical child to staff ratio for a daycare?
The typical child to staff ratios for a daycare are:
- 1 adult staff for every 4 infants (age 0 to 12 months)
- 1 adult staff for every 6 toddlers (age 1 to 3 years)
- 1 adult staff for every 10 pre schoolers (age 3 to 5 years)
- 1 adult staff for every 12 school aged children (5+ years old)
Source - Childcare.gov
These ratios will help you estimate how many staff members you will need. Our financial projection template makes this easy. Just enter in your ratios and the number of children you expect to have in each age group and the model will automatically calculate the number of staff required to maintain your ratios. See the input daycare staffing table below:
What are the typical operating costs for a daycare?
Your largest operating expense for a daycare facility is likely to be your rent.
It should cost between $20 and $30 per square foot to rent a daycare center space based on available spaces on Loopnet .
Other operating costs for a daycare center include:
You can see how you can enter in your operating costs into our financial model below:
How much profit can a daycare make?
The average daycare profit margin is 6.5% according to Daycare Business Boss .
Once you complete your projections you will want to take a look at our At a Glance tab to make sure that your projected profit margins aren’t way out of line with the industry norms. You can find projected profit margins for your daycare below:
This is an important aspect that you may not find in most daycare business plan templates, but it's still essential. An appendix includes any additional information to help you understand your business plan. This might include things like your:
- Business licenses
- Insurance policy
- Lease agreement
- Sample contracts
- Staff bios
This section adds credibility to your daycare business plan and shows that you've done your homework. Including all of the necessary details in your appendix will give investors peace of mind and show that you're serious about starting a daycare center.
An executive summary is a brief overview of your business plan and is often considered the most important section. It should be two pages long, with a clear description of your business, your goals, and why you will achieve them.
There are several key elements to include in your executive summary:
- Business Name: This is the name you have chosen for your business.
- Location: Include the city, state, and country where your business will be located.
- Business description: Describe what type of business you will be operating.
- Target market : This is the group of people you will be targeting as customers.
- Competition: Who are your competitors, and how will you compete with them?
- Product or service : What product or service will you be offering?
- Sales and marketing: How will you generate sales?
- Financials: Include a five-year income statement, balance sheet, and cash flow statement.
- Management team: Introduce your management team and their experience.
- Exit strategy : This is the plan for how you will eventually sell or otherwise exit the business in case you decide to retire or move on to other projects.
The executive summary is the most crucial section of your business plan because it gives investors and lenders a quick overview of your company and its prospects. Be sure to include all of the key elements listed above, and keep it under two pages in length.
What Are The Benefits of Creating a Daycare Business Plan?
Research shows that a business plan helps business owners make better decisions, turn abstract goals into tangible objectives, and track progress over time. But what does this mean for those who want to open a daycare?
Creating a business plan forces you to think through every step of starting your company. It's a valuable exercise that can save you time and money in the long run. Even if you don't end up following your business plan to a tee, the process of writing it will help you better understand your business and what needs to be done to make it successful.
There are many benefits to creating a daycare business plan, including:
Gives You a Roadmap to Follow
As with any journey, it's always helpful to have a map. A business plan is that map for your daycare business. It will give you a clear idea of where you want to go and how you can get there.
Helps You Secure Funding
A business plan is essential if you're looking for investors or loans. It will show potential lenders and investors that you've put thought into your business and have a solid strategy for making it successful.
Ensures Your Daycare Business is Feasible
When you're starting a business, it's easy to get caught up in the excitement and overlook potential problems. A business plan forces you to take a step back and assess whether your business is truly viable. It also helps you identify any areas where additional research is needed.
Final Thoughts
A daycare business plan is a valuable tool to help you make your business successful.
It is worth noting that your business plan is not a one-time exercise but should be updated regularly as your business grows and changes. This document is meant to be a living document that evolves as your business does.
If you're unsure where to start, there are plenty of resources available to help you, including daycare business plan examples online, books, and daycare business plan templates.
You can also use our daycare projection template to get your financial plan ironed out and ready for your business plan.
The most important thing is just to get started. The sooner you create your business plan, the better prepared you will be for success.
You can get the Daycare Facility financial projection template here!
The template is simple to use and will save you loads of time while still producing professional looking daycare projections. ProjectionHub has helped more than 50,000 businesses create financial projections so you can be confident that you can do it too.
The daycare business projection template includes:
5 Year Daycare Facility Pro Forma Financial Statements
CPA Developed & Completely Customizable
Free Support & Projections Review
Compatible with Google Sheets
Free expert review of your completed projections
The template is easy to use and you do not need to be an excel wizard to fill it out. Editable cells are highlighted in blue, a video guide is included, and our team is available to answer any questions you have.
You can see the complete walkthrough and demonstration of the daycare business forecast template here:
Get the template today for just $79
If you have any questions before purchasing, please feel free to begin a live chat or email us at [email protected]
100% money back guarantee in accordance with our terms and conditions
Photo by Pixabay
About the Author
Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 40,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.
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How to Write a Business Plan for Daycare and Preschool
- brightwheel
- Running a business
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.
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:
- What do you plan to do with the money?
- Has your business been up or down in recent years?
- Is your company losing money? Are there signs of growth for the future?
- How do you plan to repay your investment?
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
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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A list of everything you need to start an early education program.
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IMAGES
COMMENTS
Daycare Business Plan Template · 1. Executive Summary · 2. Company Overview · 3. Industry Analysis · 4. Customer Analysis · 5. Competitive Analysis · 6. Marketing
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
Safe Kids Child Care will succeed by offering its clients' children a safe and secure care environment, and close personal attention. The goals of the center
It's just as important to plan for the financial future of your business. These sample business plans for day care centers will help you write a business
The childcare industry needs you! Provide valuable services while profiting with your own daycare. Download FREE daycare business plan
Daycare Business Plan Template ... If you want to start a daycare business or expand your current daycare or child care business, you need a
Your daycare business plan should be an elevator pitch in itself. It should be attractive to potential partners and investors. Basically, it should give them a
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
A. Business Plan Outline for Child Care Centers. B. Sample Survey for Parents. C. Curriculum and Instruction in Early Childhood Education.
As an example, Louisiana has placed childcare licensing and standards under the supervision of the Department of. Education. Page 10. Trinity Oaks Child