daycare center business plan

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. 

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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Daycare Business Plan Template

Written by Dave Lavinsky

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 Day Care Business Plan?

A daycare or child care center is typically funded through small business loans, personal savings, credit card financing and/or angel investors. This is true for a business plan for daycare or a childcare business plan.

What are the Steps To Start a Daycare Business?

Starting a daycare 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 Day Care Business Plan - The first step in starting a business is to create a detailed child care business plan that outlines all aspects of the venture. This should include market research on the childcare industry and potential target market size, information on the services you will offer, marketing strategy, pricing strategies and detailed financial projections.

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 chlidcare 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 childcare   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 to reach your target audience.

Learn more about how to start a successful daycare business:

• How to Start a Daycare Business

Where Can I Get a Daycare Business Plan Example PDF?

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

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Day Care Business Plan

Start your own day care business plan

Safe Kids Child Care

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

There are an increasing amount of families who have become dependent on two incomes, which has created the necessity of the child care industry. Increasing need means that there are more children that are in need of a safe enriching place to go. 

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 are dual-sided: to help parents feel good about the care of their children, and to make it a safe, educational, and fun experience for the child. 

Safe Kids Child Care has a focus on meeting the local need for child care services within the 10-mile radius of Lynn. Children are taken in flexibly on either a full-time or part-time basis.

Competition

There are over 300 child care providers in the local area. The larger commercial chain child care centers, such as KinderCare, have a majority of the market share. These larger chains compete well because of a good reputation among the consumer market. Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.

 Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.

Expectations

Safe Kids is an exciting opportunity that provides safe and secure child care to the Lynn, MA neighborhood. Safe Kids will reach sustainable profitability over the next three years. Through a combination of well-priced services, outstanding customer service, and a well seasoned management team, Safe Kids will quickly gain market share and a reputation as a premier child care provider.

Financial Highlights by Year

Financing needed.

We plan on having $40,000 to start our business. Each owner will contribute $20,000 to our opening costs. 

Problem & Solution

Problem worth solving.

The child care market is quite competitive in the Boston area. There are over 300 different facilities. There are two general types of facilities. The larger style is commercially run, typically a corporate franchise center. These facilities are both regional and national. Currently, the four largest child care facilities in the USA account for 29% of the market. There are also many different smaller locally run and owned faculties. While the largest facilities can host between 20-100 children, the locally run centers typically have a maximum capacity of 20 children.

Target Market

Market size & segments.

Full-Time Working Couples

The company wants to establish a significantly large full-time regular client base in order to establish a healthy, consistent revenue base to ensure stability of the business. Customer relations are extremely important, as it is imperative to keep the parents pleased in order to keep their children in the daycare center.

Part-Time Workers / Drop-Ins

Part-time workers and drop-ins comprise approximately 20% of revenues. While this market is not the primary focus, sufficient flexibility to handle this secondary market is important to producing supplemental revenues.

Current Alternatives

Our advantages.

Child care competitive edge is the facility’s efforts in obtaining all appropriate licensing and certifications. Additionally, thorough pre-hire background screenings are performed on all individuals before hired for employment.

Keys to Success

Keys to success for the company will include:

• Maintaining a reputable and untarnished reputation in the community. 
• Quality care. 
• Competitive pricing. 
• Flexible hours.

Marketing & Sales

Marketing plan.

The differentiating effort will be benchmarked customer service. A customer-centric philosophy will be infused within the entire organization. Safe Kids will spend extra money to attract and train the best employees. This is especially important because it is the employees that interact with both the children and parents and will have the best chance to impress them enough to turn them into a loyal customer as well as to be vocal in telling their friends about their positive child care experience. 

We will have a Social Media Campaign which uses Facebook and Linked in. We will have experts answer child care questions if the public wants. This gives the public confidence that we know what we doing. We will have customer reviews and allow our customers to talk to us. 

Safe Kids Child Care will make a significant profit through the excellent care of children. Even though Safe Kids charges less, the company will see profit within the first year due to beneficial word-of-mouth advertising. The company expects to double its’ clientele every six months, for the first 18 months.

Locations & Facilities

The facility will originally consist of a 1,300 sq. ft. house in a quiet, residential neighborhood. The yard will be fully fenced in, to ensure no one can either come in or wander away. The yard will be furnished with safe, entertaining toys, as well as a sandbox.

Milestones & Metrics

Key metrics.

Our Key Metrics are: 

• Facebook page views, Twitter re-tweets, and new potential clients calling saying that a current client referred them. 
• The number of children we take care of daily 
• The number of children that are signed up for the monthly care 
• The amount of training our staff has to take care of children and keep incidents down to zero. 

Ownership & Structure

This business will start out as a simple proprietorship, owned by its founders. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suit the future business needs.

Management Team

Personnel Table

Financial Plan investor-ready personnel plan .">

Key assumptions.

Our key assumptions are: 

• There are children from families where both parents work or need to work. The children need somewhere safe and enriching where they can grow and make friends while their parents get a chance to get back to him.
• Adults sometimes have emergencies and they need to have a place to leave their children when they can’t be with them 
• The community appreciates the it takes a village mentality. They appreciate we have resources and experts that will answer their questions. We assume they will come to us if they need help, we won’t go out of our way to advise. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Our Start-up Expenses are $3000 including: 

Legal $1,000

Brochures $350

Stationery etc. $100

Activity Supplies $250

Food Preparation Supplies $300

First Aid Supplies $200

Cleaning Supplies $150

Nap Time Bedding $250

Sources of Funds

Our two owners will put up 20,000 dollars each, totaling 40,000. 

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement

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The Ultimate Guide on How to Start a Daycare Center

• brightwheel
• Running a business

For children, daycare centers are a jumpstart to healthy growth and development. For you, they could be the key to financial freedom and a rewarding career. 

Opening a daycare center is not as easy as ABC, 1-2-3. There are several components to consider like your location, the overall economy, operating costs, licensing, insurance coverage, and more.

This ultimate guide has everything you need to know about opening a daycare center and the nine steps you can take to start your business.

Daycare centers in the current economy

The daycare industry has always been essential. However, the COVID-19 pandemic did have a negative impact on many childcare programs. 

To cooperate with social distancing regulations, USA Today reported that more than 2 in 3 of the United States’ formal childcare centers were closed or operating at reduced capacity. In addition, many families lost the need for childcare when many corporate jobs shifted to remote work. 

Additionally, daycare centers continue to battle against inflation affecting the costs of rent, utilities, food, supplies, staff salaries, and tuition. And while this might all seem daunting, the childcare industry is on the rise again.

With the reduction of COVID-19 regulations, parents have returned to their offices, and the need for childcare has returned. The U.S. Bureau of Labor Statistics reports that the job growth outlook for childcare workers between 2022 to 2032 is projected to decline 2% however, it is projected that there will be 153,000 openings for childcare workers each year, on average, over the decade. And while the economy can quickly bring about the downside of any industry, there are many benefits associated with opening a daycare center to consider.

The benefits of opening a daycare center

The significant benefits of opening a daycare center include personal childcare, financial freedom, tax benefits, and a rewarding career.

Personal childcare

When parents of young children go to work, they have to consider child care. Who will watch their child? How much will it cost? Will they be available to drop them off and pick them up? Opening a daycare center eliminates these questions for you. Starting a daycare business could lead to increased financial freedom if you already provide at-home care for your own children. 

Financial freedom

Most workers in the corporate world rely on their supervisors and managers for a paycheck. Opening a daycare center gives you financial freedom and autonomy over your income. Owning your own business also allows you to make decisions to propel the business and ensure your financial security.

Tax benefits

Opening a daycare provides tax benefits that save you money. For example, as a business owner, you can write off certain daycare expenses, including your utility bills, vehicle, and childcare supplies. 

Opening an in-home daycare may also allow you to write off a portion of your housing payment as a business expense when you file taxes.

Rewarding career

There is no doubt that many daycare owners and workers find their job of teaching, helping, and encouraging children rewarding. Daycare is essential to young children's cognitive, physical, and social-emotional development. Teachers have a direct hand in shaping their minds and behavior.

Before opening a daycare, ask yourself why you want to start a daycare. For example, are you passionate about fostering young children's development? Do you want to help families in your community? Reflecting on the reasons why you want to start a daycare will motivate you through the process and help your business succeed.

How much does it cost to start a daycare?

Before we outline the steps to starting your daycare center, you might find it beneficial to understand the financial obligation you’ll be making. The average cost to start and run a daycare business is about $50,000. The typical range is between $10,000 and $100,000 , depending on various factors like location, size of daycare, number of children, and staff.

Overall, home-based daycares usually has less start-up costs since you don't need to find a facility. On the other hand, medium to large-sized daycares can cost upward of $50,000, and the largest daycare centers can cost upward of $100,000, depending on your location. The typical operating costs of running a daycare center include:

Rent and utilities

You may opt to operate a home-based daycare center, which may cost less to operate than renting a commercial space. Most commercial spaces charge between $0.60 and $2.50 per square foot. Utilities may include electricity, water, heating, TV, phone, and internet.

Employee compensation

Hiring teaching and non-teaching staff is crucial if you plan to run a daycare. According to data from Salary.com as of May 2024, childcare workers in the U.S. earn an average salary range of $29,000 to $35,600 per year. However, this range may differ based on your location as well as the employee's education, certifications, and years of experience.

Licensing fees

Daycare business licensing requirements and fees vary from one state to another. You should inquire with your state's early childhood education department to determine what licenses will be required for your business.

Insurance costs can range between $3,000 and $5,000 a year, depending on your specific policy and location. You may have to buy the following insurance policies: liability policy, property policy, workers’ compensation insurance and errors and omissions insurance.

Supplies and equipment 

You will need plenty of educational supplies and various furniture and equipment at your daycare center. Typical costs range from $30,000 to $40,000. Indoor furniture and equipment such as cribs, tables, changing stations, mats, chairs, computers, and outdoor furniture like playground equipment is essential for your center. Educational supplies like age-appropriate toys, books, and craft supplies, and housekeeping supplies such as cleaning supplies, diapers, and wipes should also be included in your budget.

If your center provides meals, you will also need to budget for the cost of food and other kitchen equipment and supplies like plates, cups, and napkins. The USDA website provides information on Child and Adult Care Food Program nutrition standards that most centers must abide by.

Advertising and marketing

Advertising and marketing are crucial for new and established daycare businesses. The total advertising and marketing costs can range between $1,000 and $1,500. These expenses typically include things like printed flyers or other marketing materials, website costs, or ads on social media.

When opening a daycare, use this information to estimate your daycare’s monthly budget and expenses.

How to start a daycare in 9 steps

Opening a daycare requires careful preparation. Follow these steps carefully in accordance with your local and state guidelines to keep your business compliant and help your daycare run smoothly.

1. Learn about daycare licensing requirements 

Daycare businesses often start small. You might transition from babysitting and nannying to owning your own childcare business. Making that transition requires you to be compliant with local and state regulations. 

To comply with your state's specific rules and regulations, check out Child Care Aware of America’s licensing guidelines for childcare and daycare providers. This resource allows you to research the requirements in your specific state and city. 

If the information for your state is unavailable, contact your state’s Department of Children and Family Services (DCFS) or equivalent agency. While the requirements will vary across the country, you typically need to meet specific education and training requirements to obtain a childcare license. 

For example, some states require that a childcare center director has a degree in child development or a related field, while others might require a Child Development Associate (CDA) credential or years of experience working with children. 

Your local Child Care Resource & Referral Agency (CCR&R) will play a significant role in the information you need. Use them as a resource to understand and remain compliant with all childcare regulations.

2. Write a daycare business plan

Writing a daycare business plan will provide a great advantage and guide you through the rest of the startup process. 

To start, decide on a name for your daycare as well as a mission statement. You'll also need to determine your marketing plan, organizational plan, staffing, operations, and budget.

Next, you will need to research the costs of successfully launching a profitable daycare business. Consider the financial aspect of your daycare startup: are you using your own money or seeking a small business loan? Have you looked into daycare grants ? 

Creating and setting financial goals is crucial to running a successful business. In business, everything costs money, so make realistic expectations and estimates.

For additional help, the U.S. Small Business Association provides detailed instructions on writing a general business plan.

3. Find a location for your daycare

Are you starting an in-home daycare ? Are you looking to rent an existing daycare center? Are you planning to start a daycare business from scratch with a new facility?

You’ll often hear the phrase “location, location, location” in real estate. Consider this when searching for your daycare facility location. Note that all families will likely have a preference on where to send their child. Some might choose a quiet suburb over a bustling city. A facility next to a highway might raise safety and security concerns for some families. Remember these factors when searching for a location that fits your business needs.

Additionally, check your city zoning laws and childcare licensing guidelines to ensure your daycare business location is compliant with all regulations.

4. Get insurance for your daycare business

Depending on the type and size of the daycare you're opening, you will need various insurance policies . 

Most states require that daycare facilities obtain a license from their state's Department of Health and Human Services (DHHS). Part of the licensing process includes getting liability insurance. Liability insurance protects you and your business if someone gets hurt on your property. It is essential when caring for other people’s children.

Other types of insurance that could be beneficial in running your business include workers’ compensation—if an employee is injured on the job—and commercial property insurance—if your daycare center or assets are damaged and need to be repaired or replaced.

Insurance can get complicated. Find out what coverage is required and check your local childcare provider licensing requirements for guidance.

5. Prepare your daycare facility

What do you need to open a daycare business? You'll need furniture and supplies if you're getting ready to open a daycare center. Use this list to guide you through your preparation.

• First aid kits
• Smoke detectors
• Carbon monoxide detectors
• Fire extinguishers
• Emergency preparedness kit
• Emergency plan
• Cleaning supplies (all-purpose cleaner, vacuum, rubber gloves, etc.)
• Bathroom supplies (sponges, bucket, mop, etc.)
• Hand sanitizer
• Sanitation plan
• Highchairs and/or boosters
• Nap mats and/or cribs
• Step stools
• Shelves and/or storage system
• Crib mobiles
• Stacking rings
• Nesting cups or boxes
• Large play vehicles
• Dolls and stuffed animals
• Musical instruments
• Attendance tracking
• Automated billing
• Daily event tracking and recording
• Digital check-in/check-out system

After getting the necessary supplies for your daycare facility, preparing the space also means ensuring it is childproofed. Having safety supplies and measures in place is an irreplaceable step, but you’ll need to take it further. Secure furniture and large appliances to the wall. Install covers on electrical outlets. Avoid keeping small items and toys around the facility to prevent choking.

When opening a daycare, the safety of the children comes first. So spend the time and use the proper resources to set up a safe, compliant daycare center.

6. Develop policies and procedures

Use childcare forms and templates to kick-start developing policies, procedures, and handbooks for your staff and families. 

Three important forms are daily report, staff evaluation, and enrollment forms. 

• Daily report forms allow the staff to communicate with the parents on their child's progress. 
• Staff evaluation forms help you monitor your employees' performance at your center and also provide an opportunity for you to support their professional development.
• Lastly, enrollment forms will typically be one of a parent's first interactions with your business. Carefully craft the messaging to demonstrate a welcoming, inclusive environment for families and their children.

As mentioned in the previous section, preparing your daycare facility also includes needing emergency and sanitation plans. You’ll want to develop a disaster or crisis management plan under the guidance of your local childcare licensing requirements. Your crisis management plan should include health, safety, privacy, and nutrition protocols.

7. Hire staff to help you run your daycare

A daycare center is only as good as its staff, so carefully consider your childcare hiring decisions.

Verify the daycare licensing requirements for staff ratios. The child-to-staff ratio ensures that all children receive adequate care, but depends on factors like the children's age and the daycare center's size. If you plan on running the daycare facility on your own, this will limit the number of children you can have in your facility.

Additionally, you will need information on the licensing requirements for teachers’ educational backgrounds and other qualifications. Childcare staff may also be subject to criminal background checks and fingerprinting for further investigation. Therefore, verify references and education levels rigorously to avoid faux credentials.

8. Invest in childcare software

One of the best ways to start a successful daycare is to take advantage of the fantastic daycare technologies at your disposal. Streamlining your administrative tasks gives you more time to focus on providing families with a quality childcare experience. 

Brightwheel makes easy-to-use childcare software to help you manage your daycare and stay in touch with families. Your staff can use brightwheel to record and track daily events and activities , and parents can get real-time updates delivered to their mobile devices throughout the day.

Our powerful daycare app also offers secure, digital check-in/check-out and an automated paperless daycare billing system .

9. Market your daycare business and seek applicants

You'll need a marketing strategy for your childcare center that includes marketing collateral and an online presence. 

Here are some ideas to get the word out about your daycare:

• List your business in local childcare directories and participate in your community's daycare or preschool enrollment fairs. 
• Advertise through local businesses, parent groups, local events, and popular childcare blogs. 
• Try popular early education sites like Tinybeans and Winnie .
• Run a social media campaign focusing on your target population.
• Host a grand opening event to attract families. 

Once you’ve managed to fill your inaugural child roster, continue with ongoing marketing efforts so that you’ll always be building a customer base.

FAQs about starting a daycare center

Here are some frequently asked questions about starting a daycare center:

Can you open a daycare center from home?

Most states allow you to operate a daycare center from your home or private residence. Like commercial daycare centers, in-home daycare centers require a license from your state. The National Database of Child Care Licensing Regulations outlines each state's licensing policies and regulations. 

How much does it cost to get daycare licensing?

Daycare licensing fees vary from state to state, but they typically cost between $100 and $200. This cost does not include the expenses associated with any additional requirements like obtaining specific education, certification, or training requirements or making sure your facility or home is up to your state's standards.

How long does it take to get licensed?

The average time it takes to receive a daycare license varies by location but can take several months. However, this process can take longer if you lack the proper experience or documentation to fulfill your state’s requirements.

Are daycare centers profitable?

Your daycare center's profitability depends on many aspects of your business including your location, operating costs, tuition rates, and employee compensation. Generally, daycare centers in areas with higher costs of living can typically charge more for tuition. 

How much can you charge?

The average cost of center-based daycare in the United States is $10,000 - $12,000 per year. However, the price you charge for childcare will depend on numerous factors, including business location, local rates, average state tuition, and the child’s age. 

Your rates can also fluctuate based on what kind of child care you provide and whether you offer part-time, full-time, or after school care. 

How much does it cost to get insured?

The cost of business insurance varies based on the type of coverage policy. On average, you’ll pay the following premiums for business insurance:

• Business owner’s policy (BOP) = $84/month
• General liability insurance = $53/month
• Business property insurance = $63/month
• Professional liability insurance = $46/month
• Workers’ compensation = $86/month
• Small business health insurance = $623/month, single coverage

What makes a daycare attractive to families?

When choosing a daycare center, families look for high-quality childcare programs that have the below characteristics: 

• Small class sizes with low child-to-teacher ratios
• Qualified and well-trained childcare staff with low turnover
• Highly experienced childcare director
• A safe and hygienic learning environment with age-appropriate curriculum
• Adequate learning materials and resources and nutritious foods
• Active family engagement
• Accreditation by relevant education associations

Learn more about daycare licensing regulations in your state

Daycare licensing requirements vary by state. Consult with your state's childcare licensing department or check out our guides below for more information:

• Connecticut
• Massachusetts
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Washington, D.C.
• West Virginia

Take the first step to opening a daycare center today

Now that you know the general process of opening a daycare center, research the specific requirements for your state. A lot of work goes into opening a daycare business, but the time, money, and effort you invest will be returned to you through the change you bring to the families and children in your community.

Brightwheel is the complete solution for early education providers, enabling you to streamline your center’s operations and build a stand-out reputation. Brightwheel connects the most critical aspects of running your center—including sign in and out, parent communications, tuition billing, and licensing and compliance—in one easy-to-use tool, along with providing best-in-class customer support and coaching. Brightwheel is trusted by thousands of early education centers and millions of parents. Learn more at mybrightwheel.com .

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Daycare Business Plan Template

It’s no secret—the demand for quality childcare is on the rise due to more parents heading back to work.

So, if you’ve ever thought of providing a safe and nurturing environment for children, now is the right time for you to start a daycare center!

However, establishing a successful daycare business takes more than just a passion for childcare. Well, it takes a solid business plan to stand out in the crowd and make it thrive as there are 568,000 daycare centers in the US alone.

Wondering how to create a daycare business plan?

Explore this daycare business plan template that walks you through all the key steps to draft an effective business plan for your daycare.

But first, let’s understand…

What is a daycare business plan?

A daycare business plan is the equivalent of a detailed blueprint for your business journey. This document clearly summarizes what your daycare stands for and outlines the strategies to launch childcare services.

Typically, it includes all the key elements of your daycare business, such as its concept, goals, target audience, marketing strategies, management structure, and financial projections.

Overall, this plan serves as a guide to establish, manage, and grow your daycare center effectively as well as ensures what you’re getting yourself into.

Why is a daycare business plan important?

A well-crafted daycare business plan is essential as it helps you add substantial value to your business at every stage. Here’s how it can make a difference:

1. Gives you clear direction

Starting and growing a daycare involves making several decisions, from choosing a location to deciding on the services you’ll offer.

Creating a business plan forces you to evaluate the right options, make informed decisions, and track progress over time. Plus, it helps you turn conceptual goals into definite objectives.

2. Helps you understand the target audience

For a successful daycare, you must understand the needs of parents and children in your community. Writing a business plan lets you organize your research and know your target market better.

Additionally, your plan ensures that you fulfill the needs of the families you serve, whether it’s infant care or after-school programs.

3. Lets you analyze the competition

While operating in the competitive market, you need to know what other popular daycare centers in your city offer. Developing a detailed business plan allows you to identify what your competitors do well and where they fall short.

Further, it helps you specify areas where you can stand out and position your daycare effectively by providing extended hours or unique programs.

4. Attracts and convinces investors

If you want to secure funding for starting and growing your daycare services, a business plan is crucial. A well-written business plan provides detailed financial projections and illustrates how your daycare will make money.

It also showcases the financial viability of your daycare services to potential investors or lenders and makes it easier to gain their support.

Simply put, preparing a detailed daycare business plan isn’t just a formality. But it’s a clear roadmap to navigate the intricacies of running a successful daycare, from startup to expansion.

How to write a business plan for daycare?

Preparing a good daycare business plan consists of a certain number of well-defined sections to articulate your childcare services.

Here’s a step-by-step guide to writing an excellent business plan.

1. Executive summary

An executive summary is one of the most important sections of your daycare business plan that serves as a pitch for potential investors who can provide you with funds for your childcare center.

Generally, it concisely summarizes your entire daycare business and previews everything you lay out inside the plan. Here’s what your daycare executive summary will include:

• Registered business name along with its location
• Daycare business concept and goals
• Mission-vision statements
• Target market & competition
• Marketing efforts & USPs
• Financial highlights

Overall, your plan summary provides a high-level overview of your daycare services and captures readers’ interest. So, be sure to make it short, simple, and persuasive as well as aim to keep it under two pages.

2. Company overview

The company overview section provides an in-depth understanding of your daycare business and its core values.

It covers all your business-specific details and foundational elements, from the daycare concept to its growth potential and future plans. This will help readers or investors better understand your daycare and make informed decisions.

To plan this section, you should consider emphasizing on the following:

• Type of daycare center you run (in-home, center-based, pre-school, after-school care, or daycare franchise)
• Legal structure (limited liability company, partnerships, or sole proprietorship)
• Location and reason for choosing that place
• Vision and mission statement
• Background history or milestones achieved (if any)
• Short-term goals & long-term objectives

Besides that, discuss any regulatory requirements and legal compliances involved in starting a daycare center. Also, ensure you follow health & safety policies, such as childproofing measures or illness prevention.

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3. Market analysis

The market analysis section provides a comprehensive overview of the childcare industry, its target audience, key competitors, and local market trends.

So, first, you’ll need to conduct thorough market research and explore the specific market niche in which your daycare intends to operate. Doing so will help you understand the demand for childcare services and the clients you will serve.

For instance, your target customers could be parents or guardians who consistently need safe and reliable daycare for their kids while they’re working or occupied with other duties.

Here’s a list of primary customer segments for a childcare business:

After that, shed light on the competition in your chosen area and evaluate the strengths & weaknesses of the other childcare centers.

Further, clearly articulate the competitive advantages and explain how your daycare stands out in the market. If required, perform a SWOT analysis to identify the internal & external factors that might affect your daycare.

4. Services offered

This section offers a detailed description of all the services your daycare will provide. It helps you demonstrate how your daycare will meet client needs and preferences.

For example, highlight all your child care services like infant care, full-day care, half-day care, after-school care, or special needs care.

If applicable, consider outlining any unique programs, such as educational curriculum, language classes, early childhood education, STEM (science, technology, engineering, and mathematics) activities, or arts & crafts.

Moreover, don’t forget to describe your operating hours, days of operation, and pricing strategies for each service offering.

5. Sales and marketing strategy

Your sales and marketing strategy outlines how you’ll promote your childcare business and reach your target customers.

It covers all the traditional advertising methods and digital promotional techniques you might use to attract families or working parents. This will help you build your brand’s identity and sustainable value in the market.

Here are some strategies you might include in your daycare marketing plan:

• Social media marketing (Instagram, Facebook, YouTube)
• Email marketing campaigns
• Collaborations or partnerships with local businesses
• Offline advertising in local newspapers or radio stations
• Loyalty programs or community events
• Regular communication & personalized customer service

Simply put, your marketing plan allows you to focus more on building and maintaining a loyal customer base as well as ensuring your daycare’s long-term success.

6. Management & organizational structure

Keeping a well-structured management team is especially crucial for a daycare service. It not only helps your business run smoother, but it also makes you look more responsible and reliable in front of the readers or primary lenders.

So, introduce the daycare owners, key managers, the team of childcare providers/caregivers, and administrative members in this section. Include their roles and responsibilities, educational qualifications, skills, as well as industry experience.

Furthermore, explain how each member fits their role and how their expertise benefits your business’s growth and success.

Then, try to create an organizational chart that illustrates how your team is structured and the relationships between key roles. Here’s an example:

You can also explain the compensation plan as well as mention advisory board members if your team is lacking. Highlight their specific expertise in providing strategic guidance to your childcare.

7. Operations plan

The operations plan provides a quick overview of the day-to-day activities and procedures required to run your childcare business smoothly and efficiently.

A well-written operations plan will help you and your team define the responsibilities and manage everyday processes. This will also allow you to meet business goals and client commitments while ensuring optimal results.

So, consider including the following details in your business operations plan:

• Staffing requirements & training
• Daily operations (opening/closing procedures, child drop-off & pick-up, meal times, activity schedules)
• Daycare facility and ambiance
• Cleaning schedules & equipment maintenance
• Customer service protocols

In short, this section presents your childcare’s operational intricacies and clarifies how they directly impact your service quality. So, don’t skip any essential points.

8. Financial plan

Financial planning is mandatory while writing a childcare business plan as it helps you lay a strong foundation for the financial health and sustainability of your daycare.

So, in your daycare financial plan, provide a detailed analysis of your financial projections for the next 5-7 years.

Consider incorporating these key financial statements and reports:

• Startup costs
• Revenue forecasts
• Operating expenses
• Cash flow estimates
• Break-even analysis
• Funding needs and sources
• Contingency plans

By developing realistic and comprehensive financial projections, you show potential investors or lenders that you have a solid understanding of the financial requirements and challenges of running a successful daycare.

Further, it helps you build confidence and credibility as well as increases your chances of securing the necessary support for long-term success.

For instance, you may consider formulating the key financial projections as shown below:

Income statement

Cash flow statement

Balance sheet

Download a sample daycare business plan template

So, ready to kickstart your daycare business plan writing? But need more assistance? Well, here you go; download our free daycare business plan PDF to get started.

It’s a modern business plan template that has been designed specifically for daycare businesses. It comes with step-by-step guides and examples to help you develop your own plan.

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Daycare business plan summary

Now that we’ve discussed all the key sections of a daycare business plan and how to draft them, it should be much easier for you to write a professional business plan.

However, if you’re still confused or need extra help in presenting your plan, consider using modern business plan software . It helps you create an actionable and comprehensive business plan more effectively and quickly.

So, wait no longer; start planning today!

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Frequently asked questions, what are the key factors investors look for in a daycare business plan.

The following are the key factors that investors look for in a daycare business plan:

• Market research & competitive landscape
• Financial performance and projections
• Unique Selling Propositions (USPs)
• Relevant experience in the childcare industry
• Funding requirements and use of funds
• Marketing plan

What to include in your daycare business plan?

While writing a solid daycare business plan, consider including the sections mentioned below:

• Executive summary
• Business description
• Daycare industry and market research
• Service description
• Sales and marketing plan
• Management team
• Operations plan
• Financial projections

How long should my daycare business plan be?

The length of a detailed daycare business plan might be 15-30 pages that cover all the essential elements like business goals, target market, services offered, operations plan, marketing strategy, and financial plan.

However, the business plan length may vary depending on the complexities of your services and the level of detail required.

How to make a childcare business plan?

Follow these steps to make a childcare business plan:

• Provide a brief summary of your childcare business, including its mission, vision, goals, and strategies to achieve them.
• Describe your business concept, child care services, and unique offerings.
• Analyze the local market and identify the target audience, key competitors, as well as the demand for childcare.
• Outline the business structure and shed light on the management team, including roles & responsibilities, qualifications, and experience.
• Highlight strategies you’ll use to attract and retain clients.
• Include financial needs, startup costs, revenue forecasts, and operating expenses.
• Discuss day-to-day operations, staffing & training, regulatory requirements, and childcare facilities.

How often should I update my daycare business plan?

It’s important to review and update your daycare business plan regularly, at least once a year, or more often as your business evolves. Additionally, you may update your business plan whenever significant changes happen in the regulatory environment or competitive landscape.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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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.

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:

• Emotionally rewarding: Working with kids teaches you to be patient and enjoy the simple things in life. You’ll also have the flexibility of having your own business versus being confined to a traditional day job.
• Financial freedom: By opening a daycare, you’re in control of your income rather than reliant on a typical paycheck. You can maximize your earning potential and make investments back into your own business.
• Personal child care: If you have your own child, you can care for them while you’re running your daycare. This will save you money and give your offspring opportunities to make friends with other kids. 
• Continued education: Opening a daycare can open the door to new opportunities in the field of child care. You may be presented with another job position or choose to pursue additional education of your own accord. 
• Extra money: Rather than stay home and care for your own children for free (assuming the original plan was to be a stay-at-home parent), why not make some extra money by caring for other children at the same time? 
• Tax deductions: As a business owner, you can write of certain expenses as business expenses, saving you money on your taxes. These expenses can include a portion of your housing payment (if you have an in-home daycare), your cell phone bill, your vehicle, child care supplies and more. See Tax Deductions . 

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 bizfluent.com , 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:

• Renting a daycare space
• Indoor and outdoor play equipment
• Art supplies
• Cleaning supplies
• Child care supplies (like diapers and wipes)
• Business laptop
• Licensing fees
• Food (for snacks/meals)
• Bottles, cups, plates, utensils, etc.
• Car or reliable transportation (optional)

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:

• How do you expect to be paid?
• How will you handle late payments?
• What time should parents pick up their children?
• Are there consequences for late pick up?
• What services will you provide?
• What is your policy when it comes to sick children?
• Do you offer refunds? If so, under what conditions?
• What happens if a child is injured at your facility?

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. 

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:

• Child Care Aware of America: licensing guidelines for child care and daycare providers
• United States Department of Health and Human Services: childproofing checklist
• Early Childhood Training and Technical Assistance System (ECTTAS): child care resource guide
• Office of Child Care: list of state licensing agencies
• Child Care Resources Inc.: early educator training

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

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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.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

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.

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.)

LLC Formation

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.

On a similar note...

Daycare Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 5,000 entrepreneurs create business plans to start and grow their businesses. On this page, we will first give you some background information with regards to the importance of business planning for your daycare. We will then go through a good daycare business plan template step-by-step to help you outline and create your plan today.

Download our Ultimate Daycare Business Plan Template here >

What Is a Daycare Business Plan?

A daycare business plan provides a snapshot of your daycare business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

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

Source of Funding for a Daycare Business

With regards to funding, the main sources of funding for a daycare business are bank loans and angel investors. With regards to bank loans, a lender will want to review your daycare 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 daycare 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 daycare business.

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A good daycare business plan should include the following 10 key elements:

Executive Summary

Your executive summary provides an introduction to your daycare 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 daycare that you would like to grow, or are you operating a chain of child care centers.

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

Company Analysis

In your company analysis, you will describe the type of daycare company you are operating, including a business description.

For example, you need to decide which type of child care business you plan to operate:

• Home-Based Daycare: this type of daycare business operates out of your home and typically has one or two caregivers on staff.
• Daycare Center: this kind of child care center operates out of a commercial building. It typically has multiple teachers and personnel and can provide care to many kids.
• Preschool Daycare: a daycare business that primarily serves preschoolers
• School-Age Daycare: a daycare business that primarily serves school-age kids.

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

Include answers to questions such as:

• When and why did you start your daycare 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 industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the daycare 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 daycare 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 daycare business plan:

• How big is the daycare 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 daycare 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 daycare. 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 must detail the community 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 audience in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the families you seek to serve. Because most daycares primarily serve customers in the same local area, such demographic information is easy to find on government websites.

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

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Competitive Analysis

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

Direct competitors are other daycare providers in your local area.

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

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

For each such competitor, provide an overview of their services and document their strengths and weaknesses. Unless you once worked at your competitors’ daycare 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 parents do they offer services to?
• What daycare 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 parents’ perspective.

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

• Will you provide superior daycare services?
• Will you provide daycare services that your competitors don’t offer?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

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

Product : in the product section, you should reiterate the type of daycare that you documented in your Company Analysis. Then, describe 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 child care services you offer and their prices.

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

Promotions : the final part of your daycare marketing plan is the promotions section. Here you will document how you will drive families 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 daycare 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 procedures include all of the tasks involved in running your daycare such as discussions with prospective new customers, procuring supplies, keeping the center clean, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 100th child, or when you hope to reach $X in sales. It could also be when you expect to hire your 4th employee or launch a new location.  

Management Team

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

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

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

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 creating 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 company. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While these financial statements include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your daycare center, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your company, 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 daycare 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 financial projections be sure to include several of the key costs needed in starting or growing a daycare center:

• Daycare 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 daycare center design blueprint or location lease.  

Putting together a good business plan for your daycare is an exciting process to help you develop and grow your child care business into the future. If you follow the template above including all the key sections, by the time you are done, you will truly be an expert. You will really understand the daycare industry, your competition, and your target parents. You will have developed a comprehensive business plan and will really understand what it takes to launch your daycare business, obtain the financing you need, and expand your business.

Daycare Business Plan Template PDF

You can download our daycare business plan PDF or use our sample daycare business plan to help you get started on your own business plan.

If you are looking for the quickest and easiest way to complete your business plan, Growthink’s Ultimate Daycare Business Plan Template has numerous features not available in the free template including its financial projections template which automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements.  

Don’t you wish there was a faster, easier way to finish your Daycare business plan?

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business planning advisor can create your business plan for you.

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How to Create a Daycare Business Plan

Childcare owners get into the daycare business through many pathways. Whether you are a business-savvy educator in the child care industry, a new parent looking to fill a need in your community, or a seasoned entrepreneur looking to expand your horizons – the first step to launching your daycare business is to create a comprehensive business plan.

Let’s get real for a moment here – writing a child care business plan, will take quite a bit of time, a lot of thinking, and even more energy to follow through. But, get this step right and you will set the tone and direction to create a successful daycare business (ad)venture! 

When developing your daycare business plan, it is ideal to think in the timeframe of 3-5 years. This level of long-term thinking will serve as a map on your way to your goal of establishing a solid daycare business plan to start a daycare.

Without further ado, let’s help you get started.

Here’s an overview of 9 elements that you’ll need to build a good daycare business plan. A child care business plan should include the following:

• Executive Summary 

Company Overview 

• Service Description  

Market Analysis 

• Marketing Plan  

Operations Plan

Financial analysis , supporting documents .

Executive summary for your child care business plan

This is your introduction and “elevator pitch.” Keep it short, sweet and to the point.

The executive summary section of your daycare business plan should function to get potential investors and partners excited about what your daycare center has to offer in the following key sections. 

This is an opportunity for you to include: 

• A brief but “wow!” business description
• Your mission statement

Your executive summary is a place to express what’s unique about your daycare business plan – is it the location, approach, learning philosophy, child care services, team, diversity, or something brand new? Don’t be afraid to make this your own!

This section covers the structure of your daycare business plan and business concept.

Are you planning on being a thought leader in the daycare industry within a specific niche of childcare? A special Waldorf school? A school that prioritized multiculturalism? A center that is Montessori first with Reggio influences to prioritize independent learners? Home daycares? Or do you want to build an empire with an eye on franchising your daycare business model? 

Some key elements to include in a brief overview are: 

• Your daycare business structure
• History of the business
• Core services offered
• Target age group and capacity
• Success milestones (accreditation, state-focused quality rating)  
• Mid-term business goals & requirements

Service Description 

This section dives into the nitty-gritty of what daycare services you will provide to your community and how your business will go about doing so.

Things to think about for your business description are: 

• Full-time or part-time care 
• After school care for school aged children 
• Child Care Center capacity 
• Age group information 
• Operation hours 
• Extra-curricular programs (yoga, music instruction, languages, gardening)
• Food program 
• Room layout & design 
• Furnishing & equipment needs 
• Facility management & development 
• Do you have a big vision for your daycare facility that needs to be broken down into different phases?
• If yes, what do these phases look like? 
• Will consultants be hired to support each phase of growth? Is this even necessary?
• Will there be a board involved in the decision making process (NFPs)

This is where your vision meets reality! Think of this piece as your ingredients list to build a good daycare business plan. Write everything down and ask people in your inner-circle for feedback.

Market analysis is a business way of saying, “Get to know your surroundings.”

Here’s a list of questions to get you on the right track: 

• Who is your target audience? (School age kids? Working parents? )
• What are the geographic boundaries of the client base that your business will serve?
• What is the population of young children & families in your area? (Are there many new young families moving in?)
• What is in high demand for child care services? 
• What is the supply for childcare? 
• How many daycare businesses are there in the area? 
• Where are other daycare providers located? 
• How long are waitlists? 
• What kind of programming / services are offered by other child care centers?
• What are childcare vacancies like in the daycare industry? 
• How much does childcare cost in the area? 
• What’s the dominant age group in the area? 
• What are the unique licensing & regulation requirements for child care centers in your area?

Answering as many of these questions as you can will give you a clear picture of what you’re getting yourself into and how to stand out from competition. 

Okay, let’s get practical for a minute – how can you answer these questions? Drive around. Join parent communities online. Facebook groups are great resources to understand what parents and potential customers around you are talking about, stressing about, enjoying, and prioritizing in their childcare search.

In short,  really  get to know your community of potential customers for your business. I cannot stress the importance of this step for a good business plan. Nothing beats listening to real people from your target market with real problems when building a business case. This seems simple, but it does take a lot of work and persistence to get results. 

To distill this process into 5 broad business categories for your daycare business plan: 

• Understand your target customers
• Identify the need of your target customers
• Research your competitors 
• Define your differentiators 
• Position yourself to grow your business

A note on licensing requirements and regulation : Before you take any steps towards setting up your child care business or daycare franchise, take the time to understand the center licensing guidelines and regulations that will apply to you from your local government. Make sure that you will be able to obtain the necessary licensing for your facility.

Marketing Plan 

My favourite part. Now that you have an idea of your daycare business identity, you have to have a marketing plan to promote it and make a splash!

• What differentiates you from existing daycare businesses or other child care centers in the area? 
• How can you really showcase what’s special compared to competition? 
• What are your initial marketing goals? Perhaps building out a waitlist before launching? 
• How will you connect with families you want to work with with your marketing strategy?

Building out a marketing plan for your daycare can be as simple or as elaborate as you like. Get creative with your marketing strategy and really show your personality. Here’s an in-depth post we did about marketing your child care center .

Now an idea is just a thought without a team to get it done. Your operations plan is the backbone of your business. In this section, key things to include are: 

• Who is on your management team?
• Who are your core staff members? 
• What does the organizational chart for your business look like? 
• Training opportunities & needs for staff? 
• If your daycare center is a NFP, who are the board members? 
• If your daycare center is a for profit center, will you have a parent committee that drives operations at your center?

Think of this section as building out your A-team. Why have you chosen certain people for their roles? What do your management team members bring to the table that’s unique?

This also brings transparency to how your team is structured and career development opportunities. Remember to keep growth in the back of your mind for each section of your daycare business plan. 

Now that you’ve done most of the heavy lifting, you can use all the information that you have previously gathered to come up with a financial plan for the first few years of your business operations. 

Remember, starting any business is difficult and it usually takes 3-5 years to break even and start becoming profitable.

Here are the key questions to answer in this section: 

• What is your start up budget? 
• How will you secure funding?
• What is your annual operating budget (income & expenses) 
• Income statement
• Balance sheet 
• Revenue model 
• Your current revenue & expense statement 

Need a template to get started on your financial plan? Check out  How To Manage Your Child Care Center Budget  to download the template.

Milestones 

This last section is one I like to call, the “keeping us honest” section. This is where you and your team will list down milestones that you plan on accomplishing on your daycare business plan journey. Don’t leave this section blank as it’ll be your measuring stick as you launch your daycare business plan. 

Some example milestones are: 

• Reaching 80% of capacity 
• Getting NAEYC accredited 
• Achieving the most stars in your state QRIS 
• Collecting 5 star reviews from parents for your Google page 
• Reaching 100 followers on your Facebook community 

Get together with your team and pick the measures that make the most sense for your childcare business.

Here’s a list of documentation that might come in handy when pulling all of this together. 

• Revenue & expenses sheet 
• Financial projections 
• Income statement, balance sheets and funding
• Resumes of everyone on your team
• Contracts with external consultants 
• Letters of endorsement 
• Legal documents (daycare license, property documents, articles of incorporation) 
• Daycare business plan template
• Any other relevant information 

Child Care & COVID-19 

While COVID-19 has thrown a wrench in many people’s business plans, that does not mean that you should give up on your dreams of becoming a daycare business owner. With all the change and uncertainty of the current climate comes the space for opportunity!

Centers now have to operate under different health and safety requirements, most notably reduced ratios.

Here’s a roundup of resources that we’ve compiled as a team to support your business plans during the pandemic and beyond.

• [Survey] What Parents Value In Childcare During COVID-19
• [Guide] Cold, Flu, COVID-19: A Director’s Survival Guide (with printables)
• [Article] What To Do If Someone Tests Positive For COVID-19
• [Webinar] HiMama Features To Build Trust During COVID-19  

To quote Dwight Eisenhower, “Planning is everything, the plan is nothing.” The process of defining your vision will make a difference when facing obstacles on your journey to creating a successful business.

Things won’t go perfectly according to your daycare business plan, but because you’ve mapped out your way, you will find a way to work over, under, or around those obstacles to get there.

Good luck! 

Did you know that HiMama makes it simple to get organized, stay in touch with parents, and keep on top of your operations? Contact us today to find out how we can make your daycare business plan into a reality.Do you have any pointers to add to this? We’d love to hear them. Let us know in the comments below. Don’t forget to follow us on social media @HiMamaSocial.

Carmen is the Marketing Coordinator and Preschool Podcast Manager on the HiMama team. She's been working with childcare business owners and consultants for 3 years. She is passionate making connections that empower the ECE Community through knowledge-sharing to support better outcomes for children, their families, and society!

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Carmen Choi

February 13th, 2017

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Keeping a group of toddlers occupied and writing a strong business plan may be very different tasks, but both take patience, time, and coordinating a few moving pieces.

You bring the child care skills, this guide will help out with the other one, outlining the five key areas to include in an effective child care business plan.

From financial projections to local business marketing strategies , here are the most important sections of a successful daycare business plan.

1. Executive summary

Your childcare business plan will be as functional to your business as a shelf stocked with Curious George. Not only is it an essential document if you’re raising funds for your business, but it’s also a helpful way to organize your thoughts and plans for yourself and to share them with employees.

Start every business plan with a summary to hook whoever’s reading it to learn more about your company and your proposal. Think of it a little like a sales pitch for your business and a preview of everything you lay out inside. Be sure to include:

Contact information – Include your name, number, address, email, and any other relevant contact information so potential partners know how to get in touch.

Business concept – Whether a one-person babysitting service or a 24/7 child care facility, include key details of your business, including staff size, services, a summary of general operations, and the required operating licenses you have or plan to get.

Business structure – List owners, partners, managers, and employees, and explain the structure of your business and how it will run. This should also include your target demographic and basic marketing plans.

Mission – Share your reason for starting a childcare business. For Matt and Anne Evers , owners of the Primrose School of Atascocita in Kingwood, TX, their business is personal: “Since both of our children attend the school it is very easy for us to ask ourselves when making daily decisions, ‘What’s the best choice for the child? What will result in the best outcome for [them]?’”

Keep the executive summary to one or two pages. You’ll have the space to dive deeper into the details of your childcare business in the following sections.

2. Location details

Child care is a local business, which means location, community needs, and demographics are all key in planning your grand opening.

Your business location will likely fall into one of two categories of childcare businesses:

Inside your home – Operating within your home can mean less overhead costs, fewer rental expenses, and more flexibility. To comply with local and state safety regulations, you may be required to renovate or change portions of your home. 

Outside your home – Factor in rent, utilities, and any necessary repairs to the property. Whether renting in a residential neighborhood or purchasing a commercial property, summarize your general knowledge of the building and neighborhood, plus why you plan to operate there in this section.

Since your location is important to your childcare business, include insurance costs, relevant zoning laws, neighborhood information, and applicable details on kitchen and bathroom facilities.

3. Financial layout

An effective business plan will share both a compelling narrative for your idea and the steps you’ll take to make it a success. Your financial planning section should be well-researched with estimates for costs, the funding you’re seeking, and projected growth over the next three or more years. While this section is necessary for investors and partners, it will also give you a working plan to help your childcare business run smoothly and make a profit.

When fleshing out the financial section of your business plan, include details like:

Tax plan – Share your business’s legal structure — commonly C or S corporation, general or limited partnership, sole proprietor, or limited liability company — to plan for taxes.

Insurance – Assess risk, liability, protection, and coverage options to ensure you’ve covered all the necessary bases. 

Budget – Include both costs and projected profit for your child care business accounting for personnel, equipment, supplies, professional fees, and other expenses. Include monthly and annual budgets, as well as a cash-flow forecast.

Detail your plans for fluctuations, which is common for childcare businesses. Take it from Danielle Burns, director of Lil’ Red Barn Academy in Washington whose business experienced an influx of children in the summer of 2021, despite the summer typically being a slower time.

If you run into questions with the financial section of your business plan, consider tapping an accountant for help, especially if they have advised other local businesses in your area.

4. Marketing plan

It’s almost time to spread the word about your services. Building a marketing plan as a neighborhood business is more than catchy slogans and photos of cute kids. In this section, show your understanding of your local market and how your business will support it.

When developing your marketing plan, include:

Market analysis – Summarize the state of childcare in your area: Will you be one of five daycares on the block, or are you opening up within a community that’s lacking in childcare options? Consider neighborhood trends, your competition, and the average cost of child care in your neighborhood. Include information on your target clientele and how you’ll meet their needs to show your business’s potential.

Business niche – Whether you’re focused on a specific age group or specializing in evening care, explain where you fit into the overall childcare industry and how any unique services will distinguish you from the competition.

The 5 P’s: Price, product, promotion, place, and people – You’ll want to make sure you’re offering the right prices and products to the right people in the most effective way possible. Analyze market and demographic data for marketing or advertising plans for your childcare business to reach the right clients for your business.

Start with a free business page on Nextdoor . Set one up for your local business in minutes to instantly unlock a following of your most valuable customers: neighbors. Show up in local searches when neighbors look for childcare options near them, share updates as you open and grow, and build trust in your business with recommendations.  

5. Daily operations

The details of your day-to-day operations are just as important as the big picture ideas and long-term goals you’re setting. Use this section for the details of your services, including information on:

Personnel – List your team along with the goals and responsibilities of each of their roles. Share details of your hiring practices and staff policies, from sick leave to the termination process. 

Structure – Include a schedule for what a typical day at your daycare looks like highlighting what makes your business unique: lunch or nutrition plans, classes and other organized activities, playtime, exercise, and storytime.

Parental policies – The two most important details with parents are how you plan to keep them informed, and what your policies are. Pick-up and drop-off requirements, what happens if they’re late for pick-up, behavioral issues — build an action plan to set expectations when they first enroll their children.

Emergency plans – Include fire escape plans, medical protocol, and other possible contingency plans as part of your daily operational details.

Build a community with Nextdoor

The building blocks of a successful childcare service start with a comprehensive business plan. From there, your business will rely on your local community and how you’re able to meet the needs of the families in your neighborhood to thrive. 

With one in three U.S. households on Nextdoor , neighbors use the app every day to get things done, connect with everyone and everything nearby, and pass along local recommendations. With 50,000 shared each week, make the next recommendation for your child care services with a free business page and a plan to reach local families who need them.

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Your Ultimate Toolkit for Building A Business Plan for Daycare

A good daycare business plan will guide you through each stage of starting and managing your childcare organization- including how to structure, run, and grow your new business.   

Prospective investors want to feel confident they’ll see a return on their investment and your center’s business plan is the perfect tool to assure potentials that working with you — or investing in your business— is a smart and profitable decision. In this blog, learn quick tips for building a simple daycare business plan.  

Check out the guide   for professional templates that help you build a solid daycare business plan .  

Table of Contents

• Write an Executive Summary
• Conduct an Opportunity Analysis
• Problem and Solution
• Build an Execution Plan
• Map Out Your Funding Sources
• Find the Right Vendors

How a Childcare Experience Platform Can Boost Your Business

How to build a business plan for daycare, 1) write an executive summary.

Building a daycare business plan starts with the executive summary. Although this section is the first thing people will read, it’s advised that you write it last, once you know the details of your business inside and out.  

Ideally, your executive summary will be able to act as a stand-alone document that covers the key highlights of your detailed business plan. In fact, it’s common for investors or loan providers to ask for just the executive summary when they start evaluating your business.   

As your executive summary is such a critical component of your business plan, you’ll want to  make sure that it’s as clear and concise as possible . Cover only the essential components of your daycare, ensuring your executive summary is one to two pages maximum.  

 The executive summary is a tell-all first paragraph that details…  

• The  city and state of your center (you can decide on the exact location later)
• A potential   open date
• A  projected enrollment count (number of full-time enrollments)  
• Programs you plan to offer  
• Ages you hope to serve (who's your daycare target market ?)
• A quick   financial summary (based on grants, funding, and potential revenue from projected enrollments)  

2) Conduct an Opportunity Analysis

Starting a business is tough work. 

Use your previous competitive research to determine your daycare business’s competitive advantage and position. The best daycare center will analyze a range of potential strengths, weaknesses, opportunities, and threats.

SWOT Analysis

3) Problem and Solution

Describe the problem that you are solving for your customers. Childcare centers are need-oriented, meaning your consumers have tangible pain points that you must resolve to be successful.  From there, you'll identify your daycare target market .

4) Build an Execution Plan

In an execution plan, you’ll address your marketing and enrollment plans, operations, success metrics, and any key milestones that you expect to achieve. Your execution plan should be carefully detailed...   

• Marketing and Sales  – The marketing and sales section of your business plan details how you propose to reach your target market segments and how you plan on converting those target markets.   
• Positioning Statement  – Refer back to your value proposition to create a simple, straightforward sentiment, explaining where your company sits within the competitive landscape and what differentiates your venue . This statement should be written for an investor or loan provider, rather than for your customer.   
• Mission Statement  - This should be just one or two sentences that are geared toward your target consumer and describe what your business plans to accomplish. This statement usually includes your company's core values.   
• Strategic Alliances  - You may wish to collaborate with other organizations such as local camps, after-school programs, pediatricians, or even other childcare centers that don’t offer the same activities that you do.   
• Operations – Discuss day-to-day business logistics here.  
• Milestones & Metrics  – Know what milestones you want to hit (be specific) and decide which metrics you need to track to reach these goals.  
• Company & Management Summary  – Describe the structure of your staff and teams.  
• Financial Forecasts  - A typical financial plan will have monthly sales and revenue forecasts for the first 12 months, and then annual projections for the remaining three to five years.

Need more ideas? See how to grow your childcare center's brand like a pro in this video resource ! 🙌

5) Map Out Your Funding Sources - Apply for Daycare Grants

Often, startup costs for opening a daycare are high. Certain states and counties offer grants for new daycare businesses. There are several grant options, depending on your child and family details.    

For example, there’s a Preschool Development Grant Program and a Head Start/Early Head Start grant to provide funding that expands early childhood centers and developmental programs.   

See 3 Essential Grants for Daycare Business Owners    

1. ccdbg funds.

The Child Care and Development Block Grant, also known as CCDBG Funds, provides federal funding to individual U.S. states. The goal of the grant is to help low-income families afford child care. With the recent of the American Rescue Plan Act of 2021, the CCDBG program will get an extra $15 billion in funding to support both families and childcare providers in need.  

What Can This Be Used for?   

• Parents who need financial assistance for daycare.   
• Childcare owners and directors who need help allocating funding for payroll, cleaning supplies, and other issues that have resulted from Covid-19.    
• Improve the quality of care and support childcare providers.  

2. CACFP Funds

For many daycares, the cost of food is a large, ongoing   expense . Fortunately, there are grants for child care centers that aim to alleviate this financial burden.      The Child and Adult Care Food Program (CACFP) provides funds to care centers like yours that can be used to purchase nutritious meals and snacks for eligible children. The way it works is by giving cash reimbursements to child care centers for serving meals and snacks that meet Federal nutritional guidelines to eligible children. In general, centers may be approved to claim reimbursement for serving up to two meals and one snack, or two snacks and one meal, per day to each child participant.   

• Childcare centers (owners/directors) that provide children with multiple snacks/meals (can help offset the rising cost of goods due to inflation).   
• Provides reimbursements for nutritious meals and snacks eligible for children and adults who are enrolled at a childcare center  
• Provides reimbursements for meals for children in emergency shelters

3. Childcare Expansion Initiative Grant

In February 2022, the Texas Workforce Commission   approved $75 million   to increase the number of high-quality home- and center-based childcare providers for working parents in Texas. Part of this funding will go towards the Child Care Expansion Initiative, to offer start-up funding to help expand the availability of child care in areas of the state that lack sufficient supply (child care deserts); for programs opening or expanding in partnership with a local employer; and, to expand the availability of infant care around the state.     New and existing home- and center-based child care providers who are opening or expanding their child care businesses after March 1, 2022, will be eligible to apply if they will be:     

• Serving families in a pre-defined   childcare desert.
• Operating in partnership with a local company or consortium of companies, to serve the children of their employees; and/or   
• Expanding the availability of care for infants (0-17 months).   

Funding can be used to offset operations costs incurred during startup and/or the first few months of opening or expanding. It cannot be used for major renovations or construction. Operations costs can include the use of a CMS/CRM or a unified childcare experience platform like LineLeader by ChildcareCRM . Applications will be available in June 2022 and will be accepted on a rolling basis through early 2023.

6) Find the Right Vendors

Choosing the right suppliers for your business is essential . If your vendors aren’t reliable or don’t deliver quality products, your new center will struggle to attract families. As a childcare provider, you will likely need the following vendors at one point or another:  

• Electrician 
• Plumber  
• Food and Beverage Supplier 
• Educational Materials Supplier  
• Substitute Staffing Provider 
• Accountant  
• Childcare Licensing Consultant 
• Cleaning & Maintenance  
• Childcare Management System (CMS) 
• Customer Relationship Management (CRM) Software  
• Digital Payments Provider 
• Online Forms Software  
• Childcare Experience Software 

Invest in your staff and family experience.  Save time, grow enrollment, and simplify center management with a childcare experience platform , the first and only solution to offer full-featured customer relationship management (CRM) software, a family engagement app, and childcare management software (CMS) in one unified platform. You can optimize your staff and family experience while managing your business more efficiently.

Take a look at the videos below to start your daycare business off on the right foot . Plus, learn the power of running your business with LineLeader - the only childcare experience platform .

Unlock the Full Daycare Business Plan Toolkit to Achieve Success

T he daycare business plan e-book will give you all the tools and knowledge you need to start up your own childcare business. It’s important that you identify your business objectives and use the e-book as a guideline for how to achieve those goals.   Building a daycare business plan isn't easy, but we're here to help.

D ownload a free business plan   for essential templates, tips, and best practices .  

Subscribe to stay up to date on the latest industry news, trends and best practices for growing and managing your childcare business.

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Legal Templates

Home Business Plan Daycare

Daycare Business Plan Template

Download our template and create a business plan for your daycare!

Updated September 22, 2023 Reviewed by Brooke Davis

When you are ready to start a daycare business, you need an effective plan outlining how to get there. High-quality child care is in high demand, but you must be prepared for the challenges of starting a new business.

A solid business plan will get you off on the right foot before you even open the doors of your new facility.

With these helpful tips, you can learn how to make a business plan for a daycare center. Whether you are looking to watch over young children or even need a dog daycare business plan, Legal Templates is here to help you get started.

Why You Need a Business Plan for Your Daycare Business

How to write a business plan for a daycare.

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Daycare Business Plan Sample

A business plan sets the stage for how you will operate your business and how you will get it running. A daycare is no different. Opening a daycare requires intensive planning, legal compliance, and understanding of your market.

A daycare business plan template walks you through the steps to build a proper path forward. Every successful business is planned correctly, not as you go along.

A sample daycare business plan pdf or Word document lays it out for you. You can learn how to put it together and what you must include. Many business plans help you understand what you must do to prepare.

Some are designed to recruit potential investors to your cause. Either way, you need a business plan to prepare you for the challenges and successes ahead.

Knowing how to write your daycare business plan can be tricky without some help. You may not have done this before, but a daycare business plan example can help.

Follow these writing tips in each section to create a strong business plan for your future daycare.

1. Executive Summary

The initial section of your business plan is the executive summary. This part of your plan is an introduction for whoever reads it. It is designed to offer an overview of the remaining sections. It should be concise and add only summary details—this is not the section for intensive information or data.

The executive summary will highlight what your daycare business will look like and the most crucial section of your entire plan.

This section may provide information such as:

• A business address
• Phone number, email address, and other contact information
• List of owners
• Banking information
• Start date for the daycare
• Client base
• Market niche
• Factors for success

The executive summary lets you make a case for why your particular daycare will be successful and competitive. It is also the section that helps you sell yourself and your business to potential investors who may play a critical role in starting your daycare.

Provide a mission statement that reflects your goals for the daycare and your motivation for starting your business.

2. Management Team

Your daycare business plan should include important information about your management team. The first part of this section may address ownership of the business itself. It should outline all essential ownership details, such as:

• Legal names of every owner
• Each owner’s proportionate share
• The format of ownership percentage (i.e., stocks, capital investments, etc.)
• The format of the business (Corporation, LLC, etc.)
• Contact information for each owner

You want everyone who reads this business plan to know who has a stake and how their interests are represented. These details are a crucial part of business formation and preventing costly legal disputes in the future.

The management team section should also include the profiles of your management staff. These people will run the business daily, and they should be properly vetted before being put in charge.

Your business plan should list the management teams’:

• Names and positions
• Summary of responsibilities
• Credentials and education background
• Prior employment or experience
• Early childhood education licensing or other credentialing
• Management experience
• Salary and benefits
• Past success in a similar role

This information should demonstrate why these are the right people for the job. Not only does it help you know how your business will run, but it also shows others you have a proper plan in place for your daycare.

3. Products and Services

This section lets you talk about why you are starting this business in the first place. You will outline the services or products you intend to sell to consumers. For a daycare, it should outline the following:

• Who is being cared for: Children, elderly adults, or pets?
• Business hours
• Staff costs and required credentials
• Will you offer food, diapers, and other child-care products?
• How will you measure sales metrics

Daycare is typically considered a service, but product sales are also often a part of this model. Your plan should adequately account for how you will handle this dual purpose and how it fits into your business model.

4. Customers and Marketing

You must identify your market and how you will get customers into your daycare. This section will focus on your area’s need for daycare services and the types of customers you expect to get.

Identification of customers is a vital part of a business plan and should include details like:

• How many parents need childcare services?
• What costs can families be expected to pay for your services
• The community you will target
• Demographic data for potential customers

With your customers in mind, you can focus on your marketing strategies. You want to differentiate yourself from competitors and ensure the community knows your new business. The daycare business plan must outline how you will achieve these goals.

A marketing strategy should combine both traditional and digital marketing methods, including:

• Open houses
• Word-of-mouth advertising
• Advertisements in the paper or yellow pages
• Billboards or other ads
• Television, radio, or internet advertisements
• Social media pages

5. SWOT Analysis

A SWOT analysis will address your daycare’s strengths, weaknesses, opportunities, and potential threats. This analytical method examines your company and how it will operate.

It puts each of the four metrics into a visual matrix to help prospective business owners quickly identify favorable and unfavorable factors that may affect their business venture.

A SWOT analysis should focus on how your daycare services can perform against competitors. It may address factors like:

• Any threats the daycare may face
• Competitive advantages and why they would be successful
• Areas that may be improved over time
• Technology or resources the company may use to increase efficiency
• Internal factors that may affect economic success

Detailed SWOT sections show investors you have done your homework and give you valuable data to make informed business choices.

6. Financials

A business plan should address the unique financial situation you face. Your daycare business plan should demonstrate your break-even amounts and expected profit margins.

It will also address the costs and the areas of revenue you expect. You will want to address the following:

• Enrollment fees
• Payment plans
• Cost of supplies and materials
• Employee costs
• Regulatory costs
• Additional program offerings and revenue
• Necessary loans or capital improvements

A well-developed budget can demonstrate expected cash flows versus expected expenditures. Knowing how to handle these costs will be incredibly helpful in starting your daycare.

7. Operations

Your operational plan should outline specific procedures your business and staff will follow. It will list employees and those in management positions and their responsibilities.

As in your management section, a detailed “chain of command” is essential. Staff are an important part of your operations and should be detailed here.

One of the most important aspects of a daycare operation is its location. It would be best if you addressed the following:

• The facility’s address
• The type of area it is in (residential, commercial)
• The space available and amenities
• Why is it a prime location
• Accessibility to the community for drop-off

You should also list your business hours and the services you will have available at different times. Child daycare centers differ in when they offer care—whether during the day, evenings, or even on weekends.

If you are doing other forms of daycare, you may even utilize late or overnight hours. You can decide how you run your business, but operations should be clearly outlined in your business plan.

8. Appendix

The appendix section allows you to include other documents that add to your business plan. They may include legal documents like licensing credentials, insurance information, and business formation documents.

Additional documents in this area are meant to support your business plan. The appendix might also include the following:

• Reference letters
• Photographs of the facility, locations, or general area
• Market research data
• Compliance Requirements

The appendix is a flexible section that lets you add supporting documents and other relevant information. Only add details that are helpful to your business plan. The appendix does not need to be lengthy or filled with fluff.

Legal Templates has the daycare business plan sample you need to construct your plan. With this sample at your disposal, you can formulate a business plan for your daycare to show to investors or for your purposes.

You may also use a business plan builder template to help you construct your daycare business plan step by step. See the sample below to help you get started.

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Tambov Oblast

• 2 Other destinations
• 3 Understand
• 6 Get around
• 11 Stay safe

<a href=\"https://tools.wmflabs.org/wikivoyage/w/poi2gpx.php?print=gpx&amp;lang=en&amp;name=Tambov_Oblast\" title=\"Download GPX file for this article\" data-parsoid=\"{}\"><img alt=\"Download GPX file for this article\" resource=\"./File:GPX_Document_rev3-20x20.png\" src=\"//upload.wikimedia.org/wikipedia/commons/f/f7/GPX_Document_rev3-20x20.png\" decoding=\"async\" data-file-width=\"20\" data-file-height=\"20\" data-file-type=\"bitmap\" height=\"20\" width=\"20\" class=\"mw-file-element\" data-parsoid='{\"a\":{\"resource\":\"./File:GPX_Document_rev3-20x20.png\",\"height\":\"20\",\"width\":\"20\"},\"sa\":{\"resource\":\"File:GPX Document rev3-20x20.png\"}}'/></a></span>"}'/> Tambov Oblast is a region in Russia 's Chernozemye region, bordering Voronezh Oblast to the south, Lipetsk Oblast to the west, Ryazan Oblast to the north, Penza Oblast to the east, and Ulyanovsk Oblast to the southeast.

• 52.723056 41.453889 1 Tambov — the capital has a large art museum and one of the prettier train stations in the world

Other destinations

• 51.958 41.9995 1 Ivanovka — a village notable for the estate of the composer Sergei Rachmaninoff, which is now a museum
• Voroninsky Nature Reserve

Tambov Oblast is a heavily forested area of Russia's Black Earth Region.

Tambov Oblast is not the most cosmopolitan area of Russia and visitors should expect Russian to be the only language in widespread use.

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