how to make a business plan for a daycare

How to Write a Business Plan for Daycare and Preschool

• brightwheel
• Running a business

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

What do daycare investors want?

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

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

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

Most investors look for:

Industry background and experience

Financial performance and promise.

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

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

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

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

• What do you plan to do with the money?
• Has your business been up or down in recent years?
• Is your company losing money? Are there signs of growth for the future?
• How do you plan to repay your investment?

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

Writing a daycare business plan

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

Business description

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

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

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

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

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

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

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

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

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

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

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

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

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

Your business is ready!

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

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

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A list of everything you need to start an early education program.

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How to Write a Business Plan for a Daycare: Complete Guide

• January 30, 2023

👇 Check all our resources on daycares 👇

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your daycare, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your daycare business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it’s the summary of the different sections included in your business plan.

Why do you need a business plan for your daycare?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or private grant

How to write an executive summary for your daycare?

The executive summary of your daycare business plan should include the following important information:

Business Overview

Introduce your company (its name, its mission) and the history behind it: why did you decide to create a daycare in your area today? Why you? 

Also, that’s where you should expand on the business: where will the daycare facility be located? How old are the children you target? How many children will you be able to take care of? What are the amenities (classrooms, playground, cafeteria, etc.)? 

Market Overview

Provide here a deep market analysis that backs your decision to open a daycare business in your area today. Why would your business succeed given current market conditions? 

For example, the market analysis should include information like: what are your competitors in the area? What are their characteristics, strengths and weaknesses ? Who are your target audience (parents and children)? Is that in line with the demographics in your area?

Management & People

Who is the management team? What is your/their experience in the daycare industry?

Financial plan

What is your expected revenue and profitability for the next 5 years? When do you expect to break-even? Simply include here a chart of your key financials (e.g. Revenue, Gross Profit, Net profit )

Funding Ask

What loan/investment/grant are you seeking? How much do you need? How do you intend to spend the money?

Daycare Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Daycare Business Overview

The business overview section of the daycare business plan summarizes the basics of your facility, including the background information, business model, services, target audience, and legal structure. 

a) History of the Project

When you launch a daycare business, you want it to grow and even become the best in the region if possible. One small element that can catalyze your company’s growth is its history. You don’t have to exaggerate the information here, but try to include useful details that will make your daycare business stand out. 

For a business as sensitive as daycare, trust overrides anything else. So, make sure to include in your business plan your experience and passion for children to demonstrate to investors you are qualified and the right person to successfully run a new daycare facility.

Also, flesh out the history behind the project: why are you starting a daycare now? For example, you may have noticed a lack of child care services for toddlers and infants in the city.

b) Business Model

Next up is the business model. This is the revenue-generating plan that identifies how your business operates. A daycare business model should be succinct and address specific things about the business. 

For instance, is it a commercial daycare facility or a family daycare? Is it an independent facility or a partnership? And should you opt for a daycare franchise? 

Keep in mind that daycare facilities vary by the target age group. So, you can opt for a childcare center, a family daycare, a kindergarten/pre-school, or a nursery school.

c) Daycare Services

It takes a lot to raise a child. So, be clear on the services you want to offer in your newly founded daycare facility. The quality of services will make your business more attractive. But an even bigger factor will be the type of services you provide at the facility.

Indeed, a lot happens inside a daycare facility, from hands-on learning (classrooms, private tuition) to field trips, games and community events. 

d) Pricing Strategy

Age is a key factor when setting the prices of your daycare services. On average, parents across the US pay about $9,400 per year on child care per child. Of course, the actual figure will vary based on a number of factors, but this is a great starting point when getting into the industry. 

An accurate pricing strategy can help you outshine your biggest competitors. However, don’t forget that setting cheaper prices isn’t necessarily the best strategy, just in the same way overpriced services may turn off potential clients. 

e) Target Audience

Daycare centers are so named because they are about a child’s well-being. However, the final decision rests with the parents, who must buy into your idea and long-term vision for the facility. 

For this type of business, you have a definite target market . And all you have to do is ensure your facility is closer to a busy neighborhood with many children. Find out if the families truly need child care services, why they need these services and the children’s average age. 

Finally, make sure your services are aligned with your target audience. For example, you wouldn’t necessarily succeed with a daycare operating 9am – 4pm in an area where parents typically work long hours in the city and need time to commute back to their neighborhood to pick up their kids.

Same goes for pricing: if you offer high-quality expensive daycare services, make sure your daycare is either located close to offices or in an area where affluent parents work or live.

f) Legal Structure

Finally, your business overview section should specify what type of business structure you opt for. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Daycare Market Overview

In the market overview section of your business plan, you must cover 2 important areas:

• Market trends : how big is the daycare industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
• Competition analysis : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?

a) Daycare Market Trends

How big is the daycare industry in the us.

It’s always helpful to base your business decisions on the latest trends in the US market. For instance, the US daycare market had a value of approximately $54.3 billion in 2019 . And it is projected to grow at an annual rate of 3.9% from 2020 through 2027. 

According to reports, the high number of parents occupying full-time and part-time jobs is a major driving force behind the increasing demand for daycare services. No matter how you look at it, these statistics make the daycare business even more lucrative, provided you get all the basics right through your business plan. 

How big is the daycare industry in your region?

After the US, assess the size of the daycare market in your city or area. Focus on the zone where you plan to offer daycare services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup . To give you an example, let’s assume you plan to operate in an area where there are already 10 competitors:

As we know the US daycare industry is worth $54 billion today, and there are about 230,000 child care centers , therefore the average annual turnover per child care center is around $235,000.

Now, we can safely assume that the daycare industry is worth $23 million in your area (10 centers).

How fast is the daycare industry growing in your region?

Growth is an important metric for assessing the status of the daycare industry in your region. 

Here if you don’t find information online or via your research, you can calculate growth using the total number of competitors in your area. 

For example, assuming there were 8 daycare competitors in the region in 2018, and 10 in 2022, the annual growth rate is 6% per year.

b) Daycare Competitor Analysis

At the very least, your competitor analysis should answer all the questions below:

• How many daycare businesses are the area where you plan to open yours?
• What type of daycare businesses are there: home-based vs. center-based home care, early care vs. early education & daycare, etc.
• What age range do they specialise in?
• What services do your competitors offer?
• What amenities do your competitors have (playground, classrooms, etc.)
• What’s their average price (daily rate / monthly rate)?
• What is the child / staff ratio of your competitors?

4. Sales & Marketing Strategy

For some existing daycare facilities, marketing isn’t the most important aspect of running the business. But you’ll probably have to implement a few marketing strategies at the beginning to attract the first families , especially if you’re starting a new daycare facility.

a) Daycare Market Channels

A daycare business doesn’t have diverse marketing channels like retail stores or other businesses. So, this may limit your options when it comes to new marketing channels. 

Apart from word of mouth, other marketing channels include;

• Social media
• Online listing (Google business, Facebook business page)
• Word-of-mouth

b) What are Your Unique Selling Points (USPs)? 

Daycare facilities offer pretty much the same services, and it’s not easy to stand out from the competition. However, a few factors can be useful when evaluating your opportunities in a competitive market, including:

• Target age group : You may cover a unique age group as opposed to your competitors
• Opening hours : you may offer longer opening hours to accommodate for different parents’ jobs and availabilities
• Price : Your services may be cheaper than your competitors
• Quality & amenities : Quality services and extra amenities (outdoor playground, etc.) will make your daycare facility more attractive vs. competitors
• Services : Your services may go beyond the standard hands-on learning and kid games 

5. Management & People

The 5th section of your daycare business plan should be about people. It should include 2 main elements:

• The management team and their experience / track record
• The organizational structure: what are the different teams and who reports to whom?

a) Management

Here you should list all the management roles in your company.

Of course, the amount of details you need to include here varies depending on the size of your company. For example, a small daycare business run by 1 or 2 persons doesn’t need the same level of detail vs. a large center with 50 children or more.

If you plan on running your business independently, you may write a short paragraph explaining who are the co-founders and/or senior managers (if there are any in addition to yourself). It’s important to highlight their experience in the industry and previous relevant professional experiences.

b) Organizational structure

No matter how many leadership roles there are, you should now explain how you intend to run the company from a management standpoint.

What are the different teams (management, childcare staff, cooking staff, human resources, finance, etc.)?

Note that you should include these details even if you haven’t hired anyone yet. It will show lenders and investors that you have a solid hiring and management plan to run the business successfully.

A great addition here is to add an organizational chart that list all the roles, from Directors to managers, key supervisory roles and employees. Make sure to highlight with reporting lines who manages/supervises whom.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your daycare is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to start a new daycare facility, or add capacity to an existing daycare center, renovate your facilities, etc.)
• The 5-year financial projections

a) Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project.

For a daycare, startup costs are all the expenses you incur before you open the space to your customers. These expenses typically include: renovation costs, equipment and furniture, etc.

The startup costs for opening a child care center depend on various factors such as the location and size of your daycare facilities, the capacity (the number of children you plan to have), the quality of the amenities, etc. 

We’ve identified that it costs anywhere between $130,000 to $490,000 to start a daycare business with 50 children . See below the cost estimates.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you. Let’s first start below with startup costs. 

c) Financial Projections

In addition to startup costs, you will now need to build a solid daycare financial model over 5 years.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of children over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of members as a small change in these assumptions will have a big impact on your revenues.

When it comes to the costs, consider both startup and operating costs. For more information, read our complete guide here .

7. Funding Ask

This is the last section of the business plan of your daycare center. Now that we have explained what type of daycare services your company would offer, at what price, your marketing strategy , management and people, this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations? Or will it cover the cost of the salaries of your childcare staff and other employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our daycare financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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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.

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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.)

Start Your Dream Business

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...

BUSINESS STRATEGIES

How to create a daycare business plan

• Nirit Braun
• Sep 11, 2023

When you're getting ready to launch your daycare business, one of the first things you'll want to do is create a solid business plan. Think of it as your roadmap for success. This document spells out your goals, strategies and financial projections within the childcare industry.

It serves as your trusty guidebook, helping you navigate the path to success and providing solutions for any challenges that come your way. Keep reading to learn more about the specific elements of a strong daycare business plan, and use the template at the end to get started.

Ready to launch your daycare business? Create a business website today with Wix.

Top benefits of creating a daycare business plan

Starting a daycare business demands careful planning, and a well-structured business plan offers numerous benefits that can significantly contribute to its success:

Helps raise money for your business : Experts estimate that for a home-based daycare serving four to six children, startup costs can exceed $36,000 . A comprehensive business plan is essential when seeking investors or financial support. It showcases your clear vision, market research and growth strategies, demonstrating your commitment and knowledge about the daycare industry. Potential investors are more likely to provide funding when they see a thoughtfully crafted plan that outlines potential returns on their investment.

Helps allocate resources : Writing a business plan forces you to conduct thorough research on what resources, supplies and staff are needed to launch and run your daycare center successfully. From facilities and equipment to educational materials and safety protocols, this detailed analysis ensures that you're fully aware of the startup and operational costs, preventing any unexpected surprises down the road.

Provides operational clarity : A well-constructed business plan outlines your daycare center's daily operations, including schedules, curriculum and staffing requirements. This clarity not only helps you understand the practical aspects of starting a business but also provides a structured approach to managing day-to-day activities effectively.

Highlights market insights : Through the process of writing your business plan, you delve into market research, identifying your target demographic, understanding their needs and analyzing your competitors. According to Zippia, 58% of working parents depend on childcare centers, which means you have a very large market to work with. This information is invaluable in tailoring your services to stand out in a crowded niche, creating a unique selling proposition that attracts parents and caregivers.

Helps with risk management : Starting a daycare business involves addressing potential challenges and risks. A business plan encourages you to identify these risks upfront and develop contingency plans to mitigate them. This proactive approach increases your preparedness and helps you navigate unexpected obstacles with more confidence.

Creates a profitability timeline : Financial projections included in your business plan offer insights into the revenue and expenses expected in the early stages of your daycare business. This information is crucial for determining when your business will become profitable and ensuring that you have a sustainable financial strategy.

Learn more: How to start a service business

How to create a successful daycare business plan in 6 steps

Now we’ll walk through the six essential steps for crafting a daycare business plan tailored to your company's unique needs.

Executive summary

Business and domain names

Market analysis and research

Operations plan, marketing and advertising plan, financial plan.

Thinking of developing another type of business? Check out more service business examples .

01. Executive summary

The executive summary is a concise overview of your entire daycare business plan. It provides a snapshot of your business concept, key strategies, goals and financial projections. While it appears at the beginning of your plan, it's often written last, after you've fully developed the other sections. A well-written executive summary should capture the reader's attention and convey the essence of your daycare business in a compelling and clear manner.

To write a clear executive summary for a daycare business, incorporate the following details:

Overview : Introduce your daycare business and highlight its unique features. Mention the age groups you'll serve, the educational approach you'll adopt and any specific services or benefits that set your daycare apart.

Demand : Describe the demand for daycare services in your target area. Mention any growth trends in working parents, shifting demographics or changes in government policies that could impact your business.

Operations : Briefly outline your strategies for attracting and retaining customers, managing operations efficiently and achieving growth. Touch on your marketing, staffing, curriculum and safety plans.

Staff : Highlight key members of your management team and their relevant experience in the daycare or education sector.

Financials : Provide a high-level overview of your projected revenue, expenses and profitability. Mention the timeframe you expect to break even and showcase your potential for generating returns for investors. You can also mention the amount of initial investment you're seeking and how you plan to use the funds.

Example executive summary for a daycare business

“ABC Sunshine Daycare is a premium childcare center dedicated to providing a nurturing and educational environment for children aged six months to five years. Our play-based curriculum, experienced educators and commitment to child safety make us the ideal partner for parents seeking top-tier care. With a projected 15% annual growth in working parents in our area, we are poised to tap into a significant market opportunity.

Our key strategies include partnering with local businesses to offer exclusive discounts to their employees, implementing a comprehensive child development curriculum and maintaining a low student-to-teacher ratio for personalized attention. We anticipate achieving profitability within the first 18 months, with a projected revenue of $350,000 by the end of Year 2.

We seek $150,000 in funding to secure a prime location, equip our state-of-the-art facility and launch targeted marketing campaigns. Our leadership team comprises experienced educators and childcare professionals, ensuring the highest quality of care for our young learners.”

02. Business and domain names

Knowing how to name a business is crucial for a daycare center and a key step before you register your business . It will be the foundation of your brand identity, influencing how parents perceive your services and creating trust. When choosing a name, consider its relevance to child care, its uniqueness and its ease of pronunciation and memorability.

Using a business name generator like one from Wix can spark creativity and offer unique suggestions that align with your daycare's values and mission. Once you've settled on a name, securing a matching domain name is essential for establishing an online presence. A domain name that reflects your business name makes it easier for potential clients to find you online.

You’ll want to first conduct a domain name search to ensure that the name you want isn't already in use.

Some best practices for choosing a domain name are to keep it short and memorable, which means avoiding complex spellings or special characters. Be sure to make it relevant to your specific services and values. The recommendation is to choose a domain extension (.com, .net, .org) that's familiar and commonly used.

03. Market analysis and research

Strong market analysis is vital for understanding the competitive landscape for this type of business and identifying opportunities where you can thrive. Research the demographics and psychographics of your target audience, their needs, preferences and pain points. Analyze your competitors—both other daycare centers and alternative childcare options—to identify gaps in the market that your business can address.

Incorporate this analysis into your business plan to develop a more robust marketing strategy . Highlight how your daycare's unique value proposition will resonate with parents and differentiate you from the competition. Include plans for pricing, branding, promotions and customer retention strategies to attract and retain families.

04. Operations plan

Your operations plan outlines the practical aspects of running your daycare business. This includes details such as:

Location: Explain the rationale behind your chosen location, considering factors like accessibility, safety and proximity to potential clients.

Premises: Describe the layout and design of your facility, including play areas, classrooms, restrooms and any outdoor spaces.

Equipment: List the equipment and supplies required for daily operations, from educational materials to furniture and safety equipment.

Staffing: Outline your staffing needs, including teachers, assistants and administrative personnel. Detail their qualifications, roles and responsibilities.

Healthy and safety: Highlight your health and safety protocols, emergency procedures and compliance with relevant regulations.

By including these details in your operations plan, you demonstrate a clear understanding of how your daycare business will function and meet the needs of both children and parents.

05. Marketing and advertising plan

To get started with marketing, you’ll need to develop a suite of brand assets, starting with a company logo. You can use a free logo maker to get a professional design in minutes.

Learn more: How to make a website

Your marketing and advertising plan outlines the strategies and campaigns you'll employ to promote your daycare business. Consider a mix of both traditional and digital marketing methods, such as social media. Utilize online platforms like Facebook, Instagram and Pinterest to share engaging content, showcase your facility and connect with parents. You can also use your social media accounts to collaborate with local businesses, pediatricians and schools to build a referral network and increase visibility.

Use your business website for targeted online ads to reach parents in your area who are actively searching for childcare options. Additionally, you could publish a blog on your website that offers parenting tips, educational insights and other valuable content that positions your daycare as an authority in child development.

You can also organize open houses, workshops, or parent-child events to give families a firsthand experience of your daycare's offerings.

06. Financial plan

The financial plan is a critical component of your daycare business plan, outlining your initial funding requirements, revenue projections and profitability timeline. Specify the sources of funding you're seeking—whether through personal investment, loans or investors—and detail how the funds will be allocated.

Provide a breakdown of your startup costs, including cost to start an LLC if relevant, expenses for facility setup, equipment purchase, staffing, marketing and any administrative costs. Present projected revenue based on enrollment estimates, pricing strategies and the competitive landscape.

Create a cash flow forecast that outlines your expected inflows and outflows over a specific timeframe. This projection will help you identify potential financial challenges and plan for adequate cash reserves.

Include a profitability analysis that showcases when you anticipate reaching break-even and becoming profitable. This information is crucial for both potential investors and your own financial planning.

By including a well-structured financial plan, you demonstrate your business' financial viability and your understanding of the financial aspects of running a daycare center.

Template for a daycare business plan

Note that this template is meant to serve as a starting point for your daycare business and you should customize it to reflect your specific business concept and goals.

A brief introduction to the daycare business concept

Market opportunity and growth potential

Key strategies for curriculum, staffing and marketing

Financial projections: revenue, profitability, funding needs

Company and domain name

Name: [Your Daycare Name]

Domain: www.[YourDaycareName].com

Demographics and psychographics of target audience

Competitive landscape analysis

How your daycare addresses market needs

Location details

Facility layout, safety features, outdoor spaces, etc.

Equipment, inventory and setup

Staff roles, qualifications and responsibilities

Health and safety protocols and compliance

Social media strategy

Local partnerships, collaborations with local businesses

Open houses and events

Online advertising plan and ad types

SEO and content marketing strategy

Initial investment requirement

Startup costs including facility setup, equipment, staffing and marketing

Projected revenue based on enrollment estimates and pricing

Cash flow forecast over the first year

Profitability and break-even point analysis

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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 create a childcare or daycare business plan

Claim your free Nextdoor business page

Claim your business page to get discovered by customers and manage your recommendations

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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How to Start a Daycare Business

Emma Castleberry

14 min. read

Updated March 18, 2024

Free Download:  Sample Daycare Business Plan Templates

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

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

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

• The outlook for daycare businesses

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

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

• Should you franchise?

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

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

• Step 1: Learn about licensing

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

Not all states require licenses, but you almost always need to complete a registration, depending on how many children you will be caring for.

So one of your first tasks will be determining what kind of licensing your state requires, and how many children you plan to care for at once. Many states only require licensing if you’re caring for five or more children, so perhaps you’ll choose to avoid the licensing process and keep your enrollment low.

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

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

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Here are some examples of possible licensing requirements:

• Physical space: a minimum square footage per child, both indoor and outdoor, depending on age.
• Health requirements: annual medical examinations for staff and/or children; immunization records.
• Fire regulations: a posted evacuation plan in each room and regular, documented fire drills.
• Education or training requirements: certifications in Early Childhood Education, on-going professional development for staff. Lindsey was required to have an Early Childhood Education degree or several years of experience in childcare (she qualified with the latter).

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

• Step 2: Identify existing services

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

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

• Enrollment numbers (how many children do they care for?)
• Ages of enrollment
• Tuition cost

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

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

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

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

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

• Step 3: Create a business plan

You have a business idea, and now it’s time to turn that idea into a plan. This requires some specific decision-making and research to nail down the details of your daycare. To help guide your plan, check our daycare business plan example and free template .

1. Work out the logistics

Here are some logistical questions to get you started:

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

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

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

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

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

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

2. Come up with your name and philosophy

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

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

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

[see-also] The Complete Guide to Registering Your Business Name [/see-also]

3. Establish a health and safety plan

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

4. Draw up a contract

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

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

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

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

5. Create a budget

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

Startup costs

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

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

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

• Personnel (including your salary)
• Equipment (educational, kitchen, outdoor, office)
• Supplies (educational, housekeeping, office)
• Advertising (print, online, ad space)
• Licensing fees

6. Set your tuition

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

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

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

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

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

7. Determine where you’ll get your funding

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

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

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

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

Tax credits: There are several home business tax write-offs that can offset your expenses when you are running a daycare from your home. This includes 100 percent deductible expenses like food, toys, and equipment, as well as partially deductible expenses like home insurance and utilities.

• Step 4: Get set up

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

Choose your location

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

Purchase equipment

Purchase any equipment needed for your daycare. In addition to toys, you may need sheets, mats, blankets, child-sized utensils, plates and cups, high chairs, step stools and booster seats.

Purchase insurance

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

• Step 5: Market your daycare

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

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

• Who are your potential clients?
• Where are they?
• What are they currently doing for childcare?
• What can you offer them that is an improvement on their current arrangement?
• How do you compare with your competitors?

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

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

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

• Child Care Law Center: This nonprofit provides very accessible information about the rights and responsibilities of childcare providers.
• National Association for Family Child Care: A national resource for in-home childcare providers and also a source for accreditation.
• Association for Early Learning Leaders: An excellent source for professional development, accreditation, and the host of an annual, national conference for early childhood educators.
• Child Care Aware: This website is a great place to start when you decide to open a daycare. It helps with both the business and philosophical elements of childcare.

Clarify your ideas and understand how to start your business with LivePlan

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

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How to Start a Daycare Business Plan 

A Step-by-Step Guide for Childcare Planning with Tips to Help Entrepreneurs Start Their Daycare Business

Table of contents

What is daycare and why should i start one.

• Types of Daycare Providers
• Before Starting Your Daycare Business Essential Planning Steps
• Decision Journey Map Definitions

Assess the Competition

How to start your daycare business.

• The Importance of an Execution Plan
• Execution Plan: Marketing and Sales
• Form Your Daycare Business

Get Familiar with Daycare Licensing Requirements

• Choose Your Insurance and Liability 
• How to Gain Enrollment at Your Daycare  
• Invest In Childcare Experience Software to Build Your Daycare with Less Work

Build an Expert-Level Business Plan for Daycare

The childcare industry is full of passionate, hard-working individuals. Entrepreneurs just like you are starting a daycare from the ground up. In this guide, we'll give you guidance and provide templates to build a solid daycare business plan.

According to Forbes , daycare businesses were projected to have some of the fastest employment growth of all industries through 2020. Starting a daycare is a great opportunity for aspiring business owners who have a passion for early childhood education and child development.   

‘Daycare’ is an umbrella term for various childcare options (such as Montessori, head start programs, preschool, and many more) where parents and guardians drop their children off and leave them in your care to...  

• Socialize with other children in their age group  
• Learn basic fundamentals for future academic success  
• Reach important developmental milestones

Is Starting a Daycare Business Worth It?

Starting a childcare business or franchise is profitable, emotionally rewarding, and sustainable – the need for committed childcare entrepreneurs has never been greater.   

As of 2021, there were 856,238 childcare centers in the United States. The growing popularity of childcare centers comes from the demand. Parents will always need a form of care for their kids. Plus, there’s a necessity, especially beyond COVID-19, to socialize children in an environment that fosters development.  

Types of Daycare Providers 

• In-home daycare  
• Relative care  
• Preschool  
• Independently-owned daycare
• Daycare franchises  

The Difference Between Individual Centers and Franchises  

An independently-owned daycare often has an individual owner, a center director, and possibly a few other administrative staff members – along with teachers, cooks, bus drivers, etc. The owner is typically an individual who puts their own money and savings into opening the daycare, so all business rights (name, branding, etc.) belong to them.  

Alternatively, a daycare franchise falls under a corporate brand that has made an agreement with an individual to legally establish a business – using the company’s brand or trademark. In this scenario, the franchisee usually pays an initial fee, as well as ongoing royalties to the corporate franchisor. In return, the franchisee gains the use of a trademark, support from the franchisor, and the right to use the franchisor's system of doing business (including unique business policies and procedures, such as their method for advertising or enrollment). This model can be particularly beneficial for individuals who are passionate about early childhood education but don’t know how to get started on their own.  

For example, Kids R Kids and Kiddie Academy are both successful daycare business plans in the United States. Each center operates similarly, has the same name (aside from a unique location number or city/county name), and the same branding as all locations fall under the franchisee umbrella.  

Daycare Franchise Terms

• A franchisor is a daycare company that provides its services, brand, and business operations to the individual. This may also be known as a ‘ franchise system ’.  
• A franchisee is an individual owner that is being supported by the company (franchisor). Buying into a daycare franchise makes you the franchisee.  
• The franchise refers to the legal agreement between the company and the franchisee.  
• The franchise disclosure document is the legally binding contract between the company and the individual.  

Essential Planning Steps Before Starting Your Daycare Business

1) conduct market research.

When it comes to starting your childcare center, relying on assumptions about your customers and competitors leads to wasted time, money, and effort. In contrast, businesses that conduct regular market research improve customer retention and are 76% more likely to see an increase in revenue.  

Market research is a data collection process that evaluates both consumer behavior, competitor habits, and industry trends to determine the viability of your center and build a foundation for future business operations.  

Prepare for success upfront by conducting thorough market research to understand your competition, improve communication with your target audience, and identify new market opportunities. This research should result in actual data that you can use to drive your business and marketing strategies as you launch your center.  

There are a variety of tools available to help you conduct market research - all from the comfort of your own office. Gone are the days of hiring team members with clipboards to approach consumers face-to-face. Survey Monkey, Attest, and Sprinklr all offer digital market research tools to help guide you through the process of understanding your audience, your competitors, and your industry.  

2) Determine Your Target Market

A market segment is a group of consumers that could potentially enroll at your childcare center. First, identify your daycare target market segments and determine how big each segment is.  

Be careful not to fall into the trap of defining your market as “everyone in your community.” This often leads to a ‘spray and pray’ approach to your marketing and as we know, a message for everyone really speaks to no one. When you generalize your advertising in favor of not isolating a potential consumer, you aren’t able to effectively communicate with your ideal customers – forgetting to recognize how your childcare center can appeal to them and their needs.  

A classic example is a shoe manufacturer. While it would be tempting for a shoe company to say that their target market is anyone who has feet, realistically they need to target a specific segment of the market in order to be successful. If they sell adult athletic shoes, they should be building their message to target athletes or individuals who enjoy staying active and exercising. Likewise, if you offer programs for children aged 6 months to 4 years old, you should prioritize advertising toward young adults in their 20s and 30s.  

A common strategy when identifying target markets is to use the TAM, SAM, and SOM approaches to look at market sizes from a top-down approach as well as a bottom-up approach.

Target Market Terms

This should include everyone you wish to reach.  

Example: Your entire local community.  

SAM: Your Segmented Addressable Market or Served Available Market 

This is a portion of the TAM you will specifically target because they align with your offerings.  

Example: Families with young children.  

SOM: Your Share of the Market 

This is the group of your SAM that you will realistically reach—particularly in the first few years of your center’s opening, as you may expand and grow your service over time.  

Example: Families with young children who make at least $65,000 each year in household income.  

For childcare organizations with multiple brands, schools, or programs - increasing revenue and keeping families happy is vital for growth. Your Millennial parents need a uniform, high-quality experience, regardless of location.

Standardizing business processes has a significant impact on time savings, costs, and most notably quality. In fact, standardization improves quality by   61.9% ,  on average. Create consistent  enrollment processes across all your franchise locations to ensure every family has a great experience and a positive association with your brand – leading to higher conversion success and profitability.   

To achieve consistency, your franchisees’ marketing approach and advertising material must follow all your corporate brand guidelines. Your organization should have a lead management system that supports your childcare franchise staff as they  guide families through   the decision-making journey  while also ensuring each location is delivering a consistent parent experience.  

3) Develop Your Buyer Personas

Before you begin writing your daycare marketing plan, make sure you’ve defined your market and buyer personas. Without a deep understanding of whom you’re speaking to, a daycare marketing plan will have little value.    

Audience personas allow you to dive even deeper into your target market and help you understand more than just who your customer is. These identities inform you how to communicate with your customers in a way that relates to their pain points and needs.  

Building a daycare business plan is no joke! Check out childcare business tips at a glance . 

When you understand your customer’s motivations, you can uniquely address their concerns and questions in your marketing materials - leading to increased tours, enrollments, and revenue.   

Start by listing out the various kinds of programs and classes you’d like to offer at your center.  

Then, determine who the primary decision-maker is and who the primary influencers might be in each scenario.   

Primary decision-maker : typically the individual(s) taking financial responsibility and remitting payment at your center.   

Primary influencers : are  also crucial in the purchasing process as they often have the ability to sway decision-makers.  

For example, imagine you’re promoting availability for Summer camp programs at your center. In this instance, the primary decision-maker might be the parent(s) or guardian(s) whereas the primary influencer would likely be the child who’s deciding what kind of activities they want to do this Summer.  

Audience Overview

List the audiences, personas, or segments that you want your center’s marketing and messaging efforts to reach.  

Select one audience from above and describe it to the best of your knowledge. Go beyond the traditional persona to consider motivations & behavior.  

Identify the key stages in your audience’s enrollment journey from beginning to end, knowing there may be multi-dimensional steps within a stage. Complete the table for each journey at the individual stages from the specific audience’s point of view.  

Decision Journey Map Terms & Definitions 

Stage : This refers to each stage of the enrollment journey - awareness, consideration, action, and advocacy.  

Awareness : This is when a family is first learning of your center and your brand. They are researching multiple daycare centers and eventually send an inquiry to tour your facility or learn more.   

Consideration : During this stage, a family is touring your center and may be deciding between you and 1-2 other providers. Tip: Proactively equip your staff with key talking points so they can highlight your unique center features.  

Action : This is when a parent decides to register their child for care, pay fees, and is either placed on your waitlist or enrolls.  

Advocacy : After a successful, happy experience, this parent or guardian has become an advocate for your business. They’re telling friends and family about your center. This is vital for your word-of-mouth marketing strategy.  

Emotion : Identify what the persona is feeling at each stage of the customer’s journey. They may be anxious, curious, excited, or satisfied at various points. Put yourself in their shoes.  

Key Actions : What actions would a consumer take at each stage? For example, during the awareness stage, they may see your ad on Facebook, look you up on Google, or visit your website. In the consideration stage, they may call your center to get more information, look at your services online, or read reviews.  

Questions : What questions is the consumer asking in each stage? These are the questions you need to be answering for them in your advertising and marketing efforts.  

Competitive research helps you understand why customers choose your center over other alternative care options. This information provides you with insight into how your competition is marketing their services and over time, this can help you improve your own marketing campaigns and business offerings.  

Look up similar daycare centers in your area, and see what programs they offer, the type of facilities, their capacity, and their curriculum. Then, highlight the features that make your center stand out. Showcase your selling points in all marketing and advertising efforts.  Get started with these key questions...

• Who are my direct competitors and what do they offer?
• Who are my indirect competitors
• What does my competition's pricing look like?
• Do they offer promotional pricing or payment plans?
• What do they do best?
• What do they do poorly?

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

Download the Guide

Build a Daycare Business Plan

A good 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.  

There’s no correct or incorrect way to write your business plan. What’s most important is that you identify your business objectives and use this document as a roadmap for how to achieve these goals.  

A strong business plan can help you recruit business investors, gain funding, or find new partners. 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.  

Write a Day Care Executive Summary (Daycare Business Plan Outline)

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. At this stage, you will be able to articulate your business more clearly and summarize all the information in a succinct, concise manner.  

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. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation, and more in-depth daycare business plan financials.  

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. This section is intended to be a quick read that hooks your potential investors’ interest and excites them to learn more.  

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  
• A quick financial summary (based on grants, funding, and potential revenue from projected enrollments)

This may seem like a lot of information upfront, but it’s simply a high-level overview of your plan.   

Conduct an Opportunity Analysis 

The opportunity section of your business plan includes information about:  

• The problem that you’re solving within your community
• P rograms and classrooms   do you plan to market your center(s) to
• How your daycare facility fits into the existing competitive landscape  

Opportunity Analysis: An Example 

The opportunity analysis portion of your business plan is important for outlining what distinguishes your daycare from your direct and indirect competitors. It details how you can continue to expand and grow your center in the future.  

Use your previous competitive research to determine your daycare business’s competitive advantage and position. Analyze potential strengths, weaknesses, opportunities, and threats. 

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.   

So, what is the primary pain point for them? Maybe it’s that busy, working parents need a caring, safe place for their child during the day, or perhaps families are seeking after-school care options for their elementary-aged children, or maybe parents need 24-hour childcare options when they’re traveling or working odd hours.   

Now, assess how they are solving their problems currently and where there’s room for improvement. If there's only one childcare center in your community and it has no open seats, you could be the solution. Or maybe there are lots of existing care providers in your city but they’re expensive or have rigid pickup and drop-off times that working parents have trouble meeting. Or perhaps there aren’t any existing childcare businesses within a reasonable driving distance of where you’d like to place yours.  

Defining the problem you are solving for your customers is by far the most critical element of your business plan and is crucial for your daycare business’ success. If you can’t pinpoint a problem that your potential customers have, then you might not have a viable business concept.  

To ensure that you are solving a real problem, try conducting your own survey with potential customers to get a better understanding of their needs and validate that they have the problem you assume they have. Then, take the next step and pitch your potential solution to their problem.

Do they agree that it’s a good fit or does it seem to fall flat?  See how to come up with a strategic plan for your business.

The Importance of Creating an Execution Plan

The execution chapter outlines how you’re actually going to make your childcare center work . You’l l address your marketing and enrollment plans, operations, success metrics, and any key milestones that you expect to achieve.  

Execution Plan: Marketing and Sales  

The marketing and sales plan section of your business plan details how you propose to reach your target market segments, how you plan on converting those target markets, what your pricing model looks like, and what partnerships you may need to make your center a success.   

Your Positioning Statement

Once you understand your audience, the first part of your marketing and sales plan is your 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 from the alternatives that a customer might consider. This statement should be written for an investor or loan provider, rather than for your customer.  

One daycare business plan example - a positioning statement for a 24-hour childcare center in Austin, Texas may look like this:

“For the Austin-based family who is seeking childcare around the clock, Jenny’s 24-Hour Daycare is a safe option for young children with nutritional meals, best-in-industry sleeping arrangements, a clean outdoor play area, and highly trained care professionals. Jenny’s 24-Hour Daycare is the first center of its kind within 30 miles of the Austin metroplex and offers competitive pricing and tuition payment plans.”  

Use this formula to develop a positioning statement for your center: 

Your Mission Statement

Your mission statement is a scaled-down version of your positioning 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 company core values that explain your daycare’s purpose and how you serve your audience.  

For example, Cadence Education is a leading early childhood education provider with the mission of “providing parents with peace of mind by giving children an exceptional education every fun-filled day in a place as nurturing as a home .”  

Pricing 

Your positioning strategy will typically determine how you price your memberships and packages. There are some basic rules that you should follow when deciding on your price point:  

• Cost-plus pricing : For the most part, you should be charging your customers more than it costs you to host them at your center to ensure your venue is profitable and appealing to investors.  
• Market-based pricing : Look at what your competitors are charging and then price based on what your audience is expecting.  

Strategic Alliances

As part of your marketing plan, 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.   

This partnership should benefit both of you – it may help provide access to a target market segment for your venue while allowing your partner to offer a helpful recommendation to their customers. If you’ve already established an alliance, it’s important to detail that in your business plan.  

The operations section is all about how your business works. This portion details the essential logistics such as staffing and sourcing and fulfillment. But remember, your goal is to keep your business plan as short as possible, so too much detail here could easily make your plan much too long.  

Milestones and Metrics

It’s critical that you take the time to look forward and schedule the next critical steps for your business. Investors will want to see that you understand what needs to happen to make your plans a reality and that you are working on a realistic schedule.

Then, determine how you will measure the success of each milestone by listing out the key performance indicators and metrics needed to see progress. These will be the numbers you monitor on a regular basis to evaluate the trajectory of your business. For example, you may look at how many families tour your center each week, how many children you enroll each month, or the amount of revenue you bring in per quarter.  

Company and Management Summary

The structure of your staff and teams sets your daycare up for success. In a new daycare center, there’s typically an owner (or franchisee), a center director, staff members, an enrollment or marketing team, accounting/administration, teachers, assistants, cooks, bus drivers, and janitorial staff. For example, the average small daycare business plan includes 8-10 fully licensed and/or certified early education teachers.

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. Break your sales forecast down into several rows, focusing on just high-level buckets at this point.   

Knowing how much your daycare will cost to open ahead of time can save you money, stress, and time. Daycare business plan start-up expenses vary by size, enrollment capacity, and miscellaneous needs.

Keep in mind that you can save on staffing costs and cut down on overhead with technology that helps to streamline your center’s operations. After all, 40% of Millennials prefer self-service over human contact when interacting with businesses.   

It’s essential that you find ways to enable families to book tours and enroll online without ever having to make a phone call to the center- reducing time spent on necessary-but-manual tasks for both your staff and inquiring families.  

Finally, articulate your profits and losses based on the data from your sales forecast and your personnel plan plus a list of all your other ongoing expenses associated with running your childcare center.  

See this Formula for Financial Forecasts

Step 1 : Average cost of tuition per child x your expected enrollments x 12 (annual revenue – assuming each family enrolls their child in one of your summer programs).  

Step 2 : Daycare businesses make around 16% profit from their overall revenue, after daycare expenses. Multiply your number from step 1 by .16 to get your predicted profit.   

Example : Let’s say you plan to charge families an average of $315 per week for childcare. With that, your goal is to enroll 60 students by the time your daycare center opens. Multiply $315 x 60 x 12 (annual revenue). This should come out to $226,800. Lastly, multiply your revenue of $226,800 by .16, which equals a net profit of $36,288 per year.  

Consider Various Funding Sources

Depending on your situation, there’s both loan and grant funding in childcare. Between state tax credits, loans, and grants – there are financing options for a variety of situations.  

Review Your Tax Deduction Options

Collecting tax credits is one way to receive an annual deduction on daycare costs. Based on your state, you can claim tax credits for...  

Collect Daycare Grants for Your Business

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.   

Know Which Loans Are Available to Daycare Business Owners

While grants are a wonderful option for freshly opened daycare businesses, loans are occasionally easier to come by. They’re offered widely and often have fewer requirements to qualify. Check out a few loan examples for your daycare center.   

• SBA Loans , otherwise known as Small Business Administration loans, have exceptional rates, low interest, and flexible repayment options.  
• SBA 7(a) Loans are beneficial for covering pricier equipment funds and real estate. Loans of up to $5 million are available to daycares.  
• SBA 504 Loans – these are wonderful for business expansions and involve a loan for 50% of the project cost.  

Take Actionable Steps to Bring Your Daycare Business to Life

Both Limited Liability Companies and Incorporations offer the significant legal advantage of helping to protect assets from creditors and provide an extra layer of protection against legal liability.  

The main difference between an LLC and a corporation is that an LLC is owned by one or more individuals, and a corporation is owned by its shareholders. In general, the creation and management of an LLC are considered simpler and more flexible than that of a corporation.  

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  

All states have different daycare licensing requirements. Generally, you'll follow the steps below.

1) Take a Course

Attend and complete a pre-application course (you’ll receive a certificate at the end – remember to save it).  

2) Submit Your Application

Submit your online licensing application. It'll ask for details about your business that were outlined in the executive summary.

3) Pay Fees

Pay your application fees. The fee depends on your center's capacity or the number of children you plan to enroll.

4) Complete Inspections

An inspection of your business property must be conducted.

5) Submit Your Service Payment

Register and pay for the inspection.

6) Conduct Background Checks

Submit background checks (this may also be an additional charge).

For More Information on How to Operate In Licensing Excellence, Listen to the Podcast Below

Choose Your Insurance and Liability

• Provide general liability – stay covered if your center has any property damage or injuries to third parties (children).  
• Abuse coverage protects your childcare business or franchise. If employees turn out to be abusive towards children, this policy covers defense costs and defends you against financial losses.  
• Professional liability insurance provides coverage for your business and workers if there is a neglect claim.  
• Hired and non-owned auto liability ensures everyone is covered if there is a pick-up/drop-off vehicle accident.  

*Liability requirements may vary by state.

How to Gain Enrollment at Your Daycare

From a business owner's perspective, the next step after successfully starting your daycare is to grow your center and gain enrollments.   

Begin by building a strong company culture, actively marketing your daycare center, and finding the right childcare technology to optimize your enrollment process and save time.  

See how to elevate your business plan for daycare with better waitlist management.

Create a Culture Where Staff Want to Work

A daycare center that stands out from the rest has happy staff members that want to work hard. Create a diverse employee culture that feels comfortable openly talking about situations. Provide support, patience, and room for growth. See more tips for creating a healthy and positive culture for your daycare staff .  

Market Your Center

A daycare marketing strategy starts with an achievable goal. Do you want to fill your enrollment spots? Do you want to build a waitlist? Should you focus on scheduling more tours or gaining new leads ?   

Choose a goal with measurable results. That way, you can track and analyze your marketing performance. When it comes to how to promote daycare business, marketing helps families realize you're the best childcare center on the block. Promote your centers through...

• Social media (especially Facebook – 83% of Millennials have a Facebook account).  
• Landing pages and contact forms on your website  
• Listing directories  
• Email and text marketing campaigns  
• Referrals  
• Digital advertisements  
• Flyers  
• Word-of-mouth marketing  

Tip: childcare experience software that automates the reports you need helps you to save time and improve your return on investment (ROI).  For example, a  Source of Families report shows you where your leads are coming from to optimize your efforts.

Invest In Childcare Experience Software to Build Your Daycare with Less Work  

LineLeader is revolutionary childcare software that automates lead capture, follow-up, scheduling tours, and reports. Craft  beautiful, personalized marketing campaigns to continually grow your business.  Plus, easily manage your curriculum, attendance, and billing with automated center management

Get more from your marketing while saving franchisees 10 hours every week with LineLeader. Automate everything from lead capture and reporting to center management—all from one place.

Download Your Guide

Resources to help you run your childcare business.

Disrupting the Status Quo in ECE: Business Ops’ Quest for Financial &...

How to Use A Childcare CRM to Build Web Forms & Track Your ROI

24 Ideas to Welcome Week of the Young Child in 2024

Additional resources.

For more information on specific childcare resources regarding marketing tools, campaigns, tips, and best practices - see below.

1. Learn hidden secrets no one tells you about starting a childcare business .

2. See how to operate in childcare licensing excellence to boost enrollment.

3. Beth Fiori of Tiny Treasures provides expert tips. check out ways to improve your business plan for daycare with enhanced waitlist management.

4. Discover tips to maintain the best childcare center on the block.

5. Gain advice for strengthening your daycare staff culture. 

6. Learn the benefits of building a daycare business plan , at a glance. 

LineLeader Video Resources

Capabilities

How to prepare a daycare business plan.

So you have this idea to start a daycare business . You love working with kids and are good at it. Plus, what could be more fulfilling than raising up the next generation of world changers? It sounds like a dream job!

But building a successful daycare business takes more than passion. You’ll also need a business plan. 

Let’s take a look at five steps you can take to create a daycare business plan. 

Why You Need a Daycare Business Plan

Nobody is going to force you to create a daycare business plan. Yet we highly recommend creating one. 

There are two main reasons::

• It helps you stay organized: There are a lot of things you could do to start a child care business. Your business plan will help you concentrate on what you should do to launch it effectively. It’s an organizational tool that will keep you focused on what’s most important.
• It aids in getting funding: A child care business plan also can help secure financial backing . Potential lenders will want to know about your business and, more importantly, how you’ll pay them back. A business plan will give them this information.

Write Your Daycare Business Plan in 5 Steps

The phrase “business plan” can be kind of intimidating. But crafting one for your child care center doesn’t have to be scary. Just follow the five steps below:

1. Executive Summary

Daycare business plans contain a lot of information. To make things easier on your business partners, future employees and potential lenders, start your plan with an executive summary.

The executive summary section of your business plan is exactly what it sounds like: a quick summation of all the information to follow. For example, your summary should include basic things such as your business name and contact details. It should also include a glimpse into your vision, such as how you’ll run your business and who your target customers are.

Basically, if it’s important, you should quickly mention it in your executive summary.

Write your executive summary after you’ve written the rest of your daycare business plan. This will make the process much easier. Just remember to put your summary at the beginning once it’s done.

2. Business Information

The next section of your daycare business plan should cover business information.

Why are you starting a daycare business and what’s your mission statement? Do you have specific goals you hope to achieve? Will your company be structured as a corporation, LLC, partnership or sole proprietorship? And what child care services will you provide? 

You also should share your child care center’s physical location. Are you planning to start an in-home business or will you rent a commercial space? In-home operations often are cheaper to establish and maintain, but don’t have the same income potential as full centers.

Additionally, list information regarding your competitors. How many other daycares are there in your area? Do any of them provide similar services? If so, are there enough families to support all of you? Include any information you can glean about their operations.

3. Operational Plan

How do you plan to run your child care business? Will you hire employees ? If so, what will their responsibilities be? This is all important information to include in your daycare business plan.

Don’t get overwhelmed, though. If you’re still in the early planning stages, you don’t have to have every detail ironed out yet. You can always update your business plan in the future. In fact, your plan should be a living document that grows with your business.

For now, just include as many operational details as you can. For example, if you’ve created policies and procedures for specific scenarios, or a handbook detailing your daycare’s approach to child care, add them to this section of your business plan.

4. Financial Details

Your daycare business plan definitely should include financial details, especially if you plan to approach lenders for a loan. They will absolutely require these details.

You’ll need to include information regarding start-up expenses , such as the cost to renovate your building and purchase equipment/necessities like toys, cribs and curriculum. You’ll also need to estimate ongoing expenses like the cost of utilities, food and your marketing efforts.

Next, estimate the money your business will bring in. What will you charge for your child care services? How many kids can you watch at one time? How much will you pay your employees? Use this information to develop an approximate monthly income.

Finally, include information regarding your current financial situation and any grants and donations you’ve received. 

If it has to do with money, put it in this section.

5. Marketing Strategies

Lastly, your daycare business plan should include your marketing strategy. How will you attract parents to your company and entice them to pay for your services? 

Start this section by outlining your target audience. Include demographic information like their approximate age, where they live and their household income level. If you plan to target a specific niche — kids with special needs, for example — add this information as well.

Once your ideal customer is defined, explain how you plan to reach them. We suggest a mix of online and offline marketing strategies. For instance, you could pass out flyers at local events and set up sandwich boards around your location. You could also invest in social media marketing and SEO campaigns to drive online traffic to your website .

There are plenty of ways to market your new business. Over time you’ll discover which are most effective. But for now, include every strategy you want to try.

Your Turn: Prep Your Daycare Business Plan

As long as your business plan has the information outlined in this article and is structured in an easy-to-understand way, your plan will do what it’s supposed to: keep you organized and help you secure funding.

So don’t be intimidated. Dive in and create a business plan that you can be proud of. Your child care business will be stronger because of it.

Once your daycare is up and running, Procare Solutions can help you fulfill the goals laid out in your plan.

Procare’s software helps you manage every part of your child care business, from tracking attendance to accepting payments to engaging with parents. All of our tools are designed to streamline tedious tasks so you can focus on what you do best: caring for kids.

Request a Demo

Request a demo and talk with one of our friendly Procare experts to get a tailored child care solution for the unique needs of your business.

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How to Create a Daycare Business Plan

• Posted by Carmen Choi
• February 13, 2017
• in Posted in Leadership / Management Tips

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 Choi

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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OMG this is so helpful!!!!!!! Thank you!!!!

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Home » Sample Business Plans » Education

How to Write a Daycare Business Plan [Sample Template]

Do you want to start a daycare (childcare)? and need to write a business plan? If YES, here is a sample daycare business plan template & feasibility report. Okay, so we have considered all the requirements for starting a daycare center. We also took it further by analyzing and drafting a sample daycare marketing plan template backed up by actionable guerrilla marketing ideas for child care centers.

Why Start a Daycare Business?

It is the duty of every parent- especially the mothers to see to it that their kids are properly taken good care of. However, there are times when circumstances just makes this totally challenging, as there may not be the luxury of time available to them to sit closely with their children and monitor them.

That is one of the reasons why parents would always want to take their kids to a daycare center. The question therefore is: how reliable are day care centers in seeing that the children are totally given the best of care and attention?

Before the daycare businesses came into existence, parents who could afford the luxury of hiring a home nanny whom they thought were vast and experienced in the care of children. However, as things changed and the crime rates in some areas went haywire-where some folks gained entrance into the houses of people for the sole aim of robbing them, the daycare trend took over.

And ever since the emergence of this trade, we have come to see more and more people who have a penchant for kids, dive into the industry just to tap into the profits that the day care business offers.

What Does It Take to Start a Daycare Center Successfully?

More often than not, in some parts of the world we find that some folks begin a day care business after they have been successful with running a school. Conversely, that is not to say that one couldn’t possibly start only a day care business. As a matter of fact, starting first with a day care center, helps to start on a right footing so that you are able to determine whether you will be able to have a school as an addendum business in the near future.

So, if you have scaled the hurdle of being in love with children, then starting your own day care business might be a smart business choice. Having this wish or aspiration as it were on the front burner of your mind, isn’t all that is required. As a matter of fact there are legal necessities that you have got to tidy. As well as draw up a comprehensive business plan that will guide you as you start out and trudge ahead in business.

A Sample Daycare Center Business Plan Template

1. industry overview.

Day care business is one of the easy businesses that just about anyone who has a flare for kids could readily start. There is no doubt that as the zeal to make more money heightens with parents, then the need for newer and more seasoned day care centers to arise becomes highly important. That is why investors are beginning to leverage on the high demand for day care services, to establish even better ones.

As such, in all of the states of America, there is hardly one neighborhood that doesn’t have a day care centre. The business is indeed a lucrative one and those who are into the trade of establishing them are smiling to the banks every day. However, that is not to water down the fact that loads of work has to be put in place in order to satisfy parents who use these daycare centers.

Whether you are looking to start a small or big one, truth is that there would always be the need to have kids put in these places. This is why some folks who do not have the wherewithal in terms of finance may choose to start from their homes, whilst some may want to start from very little spaces they get.

Over and above one bright ray of light as it concerns the day care business is that there is always room for expansion, as one learns on the job and then improves the services that one renders.

Setting up a day care business means that one would be dealings with little babies, and as such, care have got to be taken in order to hire not just mere employees, but to hire those who are way too vast in the trade and are capable to help the day care business to a great level. There will always be the need to garner plenty of knowledge that would be useful in giving the children the very best of experience.

The returns on investment that one attracts here is so huge that one have just got to keep at doing those things that would continue to guarantee repeat customers as well as give the kids whom are being cared for a growth experience that they wouldn’t forget in a hurry.

2. Executive Summary

Tiny Thoughts ® is a foremost day care center in Ohio, America. It has the best of aims to prepare its pupils to come out tops in all they do- given that they would be the leaders of tomorrow. We propose to achieve this and more by merging an all exclusive curriculum custom-made explicitly for children.

Our type of curriculum is enriched with extra super child care services. This is nothing like what our competitors have to offer because we offer forward-thinking technology plans, after-school training, and activities that help the kids grow better. Activities such as; arts, dance, crafts, gymnastics, theatre, sports, amongst others.

Tiny Thoughts is a privately held establishment run by its owner, Mrs. Mary McGregor. Mrs. Mc Gregor has 10years of Educational training experience. As a matter of fact   she is a master’s degree holder of child psychology. So that when it comes to child management and psychology, she is always at the top of her game.

Her advanced degree in child psychology and interest in kids is the driving force behind the establishment of Tiny Thoughts . She will be supported in daily operations by another educationist and psychologist, amongst other employees.

With the inflation bane that continues to affect the American economy, there will always be the need for parents to work more than one job per time for additional income. It is for this reason that there will always be a need for excellent child care services.

With the least population of Ohio which is at 11.59 million people, there will always be the need to have capable day cares to cater for them. That is why we have decided to position our establishment so as to meet the teeming needs of parents who want the very best for their children.

At Tiny Thoughts , we leave no stone unturned to see that we put in place high- quality child care services, thorough bred educated instructors, as well as personal skills that will allow us compete well in our market . We shall also offer competitive price as part of one of our success factors so that we can attract all and sundry to our prestigious day care center.

Furthermore, we know the importance of having an excellent rapport with parents, and the community we serve, which is why we train and even retrain our workforce so that they bring the best of skills and attitude to the table at all times.

With the aforementioned points in place, we therefore do not intend to look for long before we attract customers as we go all-out to build a loyal customer base by offering the kids at the day care a very hospitable- yet educating experience in a comfortable and beneficial environment.

3. Our Products and Services

At Tiny Thoughts ®, we are first all about making the day care center a very conducive one. We are aware of the fact that some parents might hold back when it comes to the type of vicinity their kids will be put in; which is why we have taken time to research and learn the various ways to build a world class establishment. This we have done in the state of Ohio. Our services include the following;

• Taking care of the infants, toddlers and preschoolers
• Cleaning the infants and toddlers up whilst they are dirty
• Have all kids well fed when hungry
• Keep them active with some extracurricular activities

4. Our Mission and Vision Statement

• Our vision is to build a most standard day care business, where parents can unreservedly leave their kids in our hands, and be totally satisfied in the long run.
• To establish an international standard day care center where kids can be groomed and prepared to be leaders of tomorrow.

Our Business Structure

Big establishments know that one of the greatest selling points is to have the best hands. As such; we plan to only hire the most competent and seasoned employees. This is particularly important since it is uttermost on our minds to run our day care center with an intercontinental approach. This means that we are looking to have all races enroll in our establishment.

We came up with outright buying our own building, instead of having to make do with a leased one. This is why we have resolved to have quite a number of employees to be on our pay roll because of the ample room we have. Therefore, below is the type of structure we look to build our business on;

• Chief Executive Officer (Owner)
• Assistant Director

Administrative Assistant

• Accountants / Cashiers
• Infant room Supervisor

Toddler Room Supervisor

• Preschool room supervisor

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Responsible for providing direction for the business
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals.
• Responsible for recruitment
• Responsible for payment of salaries
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for managing the daily activities in the day care center.
• Ensures that all orders and guidelines given by the CEO are adequately carried out.
• Interfaces with other employees
• Reports to the Chief Executive Officer
• Attends to Parent’s complaints and enquiries
• Prepares budget and reports for the organization
• Responsible for Training and Development in the day care center
• Any other duty as assigned by the CEO

Assistant Director:

• Responsible for assisting the director to carry out all that have been assigned by the CEO.
• Ensures that all employees carry out the agenda of the day care center to the latter.
• Responsible for quality control
• Any other duty as assigned by the CEO and director

Accountant / Cashier:

• Receives payments on behalf of Tiny Thoughts®
• Issues receipt to customers
• Prepare financial report at the end of every working Month
• Handles all financial transaction on behalf of Tiny Thoughts
• Interfaces with our bankers
• Responsible for payment of tax, levies and utility bills
• Any other duty as assigned by the CEO / Director
• Assists the director in seeing to it that all the kids are thought are line
• Ensures that all documents are safely kept
• Handles customers enquiries and keeps all records of kids and employees well
• Any other duty as assigned by the director

Infant Room Supervisor

• Responsible for supervising the nannies that take care of the infants.
• Makes sure that everything is in place
• Reports to the Director
• Relates with the nannies and cleaners
• Carries out any other task as assigned by the superiors
• Responsible for supervising the nannies that take care of the toddlers.

Preschool Room Supervisor

• Responsible for all the kitchen activities at the center
• Attends to the foods of all kids
• Takes orders that will advance the establishment from the Director, CEO and others.
• Responsible for cleaning the day care facility at all times
• Washes the mugs, spoons and other utensils
• Ensures that toiletries and supplies don’t run out of stock
• Cleans both the interior and exterior of the daycare
• Any other duty as assigned by the day care director.

6. SWOT Analysis

Our purpose of starting a day care center is to compete favorably with other schools, and surpass them. We have also decided to have a test run on the business for a period of 5 years. This is to know how we are able to fare during this time, as well as to determine if we are to devote more resources, additional money, for the expansion of the business.

We shall start with just one center for now and then see how we are able to succeed despite the myriad of competition. In arriving at all these, we deemed it fit to employ the services of an expert who has helped us with conducting a SWOT analysis.

It was expedient that we did this, so as to ensure that we have what it takes to run a day care school and perhaps even build more branches. Here is a summary of the result from the SWOT Analysis that was conducted on behalf of Tiny Thoughts;

Our area of strength to a very large extent lies in the fact that the owner of our day center is well versed in child psychology. This is really a positive one for us, because we believe that we shall be able to really handle the kids that are put in our care, unlike some folks who have no background knowledge in education and psychology.

The perceived weakness for our business could be that we are starting out as newbies and it really isn’t easy to convince people to come and enroll their kids at the day care. This is why we have got to really work hard at our advertising strategies, as well as solidify how to seal deal with our potential clients.

• Opportunities:

The fact that we intend to lower the fees involved in enrolling a kid at our daycare, seems to be one of the ways at which we will attract all and sundry. We are certain without a doubt that with the quality of our employees and services, we shall attract clients that would be highly satisfied with us.

Some of the threat our business may likely faced with might be a scenario where a kid has an illness and yet comes to the center. There may be likelihood that such an epidemic might spread to other kids. As such; this might not be nice because that might make some guardians want to withdraw their kids to a safer place.

7. MARKET ANALYSIS

• Market Trends

In the united states of America, you will quite agree that there are lots of guardians who need to work almost round the clock to eke out a living for them and their families. As such and as stated earlier, the need for someone to care for the kids whilst working in non negotiable.

That is why there will always be the need to have kids at day care centers. Furthermore, there is no indication that the day care trade would plummet anytime soon based on the statistics of parents who work that is found by experts.

There is always a boom in this business all year round, as the weather or state of the economy has nothing to do with it. That is why the services being rendered by us have to be top notch at all times. We do not want to be found wanting in any area, that is why we are sure to invest a lot in training our employees at all times.

Our positioning, as is always the case of determining the amount of customers that patronize a business is of importance to us, which is why we have chosen to start from Ohio.

Despite the fact that there loads of day care businesses who have done so well for themselves in the past, we plan to not leave any stone unturned as we continue to work at better ways to make our services known to people. Part of the marketing and sales strategies to be adopted includes;

• Commencing operation by first having a grand opening. This means that we will have a big party where we can invite those who reside in the neighborhood we propose to start out  from, as well as those from other neighborhoods.
• Ensure that we have all our professional employees present at the party and if possible show them off.
• Make use of attractive hand bills to create awareness and also to give direction to potential clients
• Position our signage / flexi banners at strategic places around the vicinity.
• Advertise our day care center on business directories, magazines and yellow pages.

8. Our Target Market

When it comes to the day care business, of course our target market is the guardians and parents. That is why we have got to primarily focus on these types of people. The people we intend offering our services to are;

• Corporate Executives
• Business People
• Sports Men and Women
• Government Officials
• Low class, middle class and high class people

Our Competitive Advantage

Going by the state where we have chosen to start from, we found that there are no day care centers in the vicinity we are, which is why if we are able to do our due diligence, and we are able to attract a crowd of customers there, then there is the possibility of hitting success in the first few years of operation.

We plan to run a standard day care business which is why we hired one of the leading business consultants to work with us in setting up our business. The business consultant we have hired has over 10 years of experience in business management and has successfully opened several day care businesses in major cities across the United States of America.

So far, there are clear indications that with what he has brought up, we shall no doubt do well and even surpass other businesses in the state. We believe that for us to have hired one of the experts in town, without a shadow of doubt, we will do exceptionally well when eventually we kick start.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Our sources of income for Tiny Thoughts is limited to the services of taking proper care of the children that have been placed in our care. However, we are not relenting when it comes to   opening different branches.

10. Sales Forecast

It is important to state that our sale forecast is based on the data gathered during our feasibility studies and also some of the assumptions readily available on the field. Below is the sales projection based on the location (Ohio), which already has an avalanche of day care schools.

• 200 pupils per session

N.B : Our annual projected sales for TinyThoughts ® is put at about $4,800-$16,500, or $400 -$1,375 monthly per child. Over and above, as Tiny Thoughts gets established, our net profitability will likely witness a boom as that indeed is what we project.

• Marketing Strategy and Sales Strategy

Tiny Thoughts will throw a grand opening party when it does start. One of the very unique things that we plan to do on that day is to; unveil some of the professionals and junior employees that we have. That is those who will help us get things started on the right footing. Why is this a big one for us? It is a big one for us because parents will have an opportunity to interact with this people, as well as ask all the questions they want.

The location of our day care center is strategically positioned to attract ample customers with little or no effort from our own part, which is why we do not make provisions for marketing and sales executives in our company’s structure. In view of that, we are going to adopt the following strategies to ensure that we do not only attract customers but generate a high number of people;

• Position our greeters to welcome parents and the kids as they arrive
• Create a loyalty plan that will enable us reward our regular customers
• Position our flexi banners at strategic positions all around the vicinity
• Advertise our Tiny Thoughts Business on yellow pages magazines
• Partner with child’/ education agencies to refer parents who are looking for a good day care center

11. Publicity and Advertising Strategy

When it comes to publicity and advertising, we have a low budget for it simply because our business is located in a place that can easily attract the numbers of customers we would need with little or no stress on our own part.

But for the fact that we hope to some day in the near future have more branches, we have decided to create a budget for publicity and advertisement for the major aim of introducing our brand in the market place. Everything that we will do in this regard is geared towards communicating our brand. Here are the platforms we intend leveraging on to promote and advertise our business;

• Place adverts on both print (travel magazines) and electronic media platforms
• Sponsor relevant educational community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, et al to promote our brand
• Install our Bill Boards on strategic locations
• Distribute our fliers and handbills in target areas where guardians can be found.
• Position our Flexi Banners at strategic positions around the airport

12. Our Pricing Strategy

When it comes to fixing prices for our services, we will ensure that we set pricing in line with what is available in the day care trade. We are very aware that we have got to lower our price so that we will be able to attract customers like never before as we seek to gain recognition as newbies. When this is achieved, then bottom line is that our customers will derive real satisfaction when they bring their kids to us.

• Payment Options

Our payment policy is all inclusive because we are quite aware that different people prefer different payment options as it suits them. Here are the payment options that will be available in every of our outlets;

• Payment by cash
• Payment via Point of Sale (POS) Machine
• Payment via online bank transfer (online payment portal)
• Payment via Mobile money

In view of the above, we have chosen banking platforms that will help us achieve our plans without any itches.

13. Startup Expenditure (Budget)

This is the key area where we will spend our start – up capital;

• The Total Fee for Registering the Business in Ohio: $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,300.
• Marketing promotion expenses for the grand opening of Coffee4All® in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• Cost for hiring Consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $52,800.
• Cost for building remodeling – $25,000.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for Start-up inventory – $16,027
• The cost for office supplies (one month) – $287
• Daycare hardware ( bins, utensil rack, shelves, food case ) – $3,720
• Cost for client reception area equipment ( plates, glasses, flatware ) – $3,000
• Cost for equipment ( cash register, security, ventilation, signage ) – $13,750
• Office equipment and furniture – $3,600
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al): $4,000.
• The cost of Launching a Website: $600
• The cost for our opening party: $5,000
• Miscellaneous: $2,500

We would need an estimate of about $100,000 to successfully set up our day care business. The amount includes the salary of all employees and the CEO (Owner) for 3 months.

Generating Funding / Startup Capital for our Daycare Business

Tiny Thoughts is a private business that is solely owned by Mrs. Mary McGregor and she does not have the intention of welcoming any external partners except immediate family members which is why she has decided to restrict the sourcing of her start – up capital to 3 major sources. These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B : We have been able to generate about $60,000 ( Personal savings $40,000 and soft loan from family members $20,000 ) and we are at the final stage of obtaining a loan facility of $80,000 from our bank. All the papers and document has been signed and submitted, the loan has been approved and any moment from now our account will be credited and we will be able to execute all the things that needs to be executed.

14. Sustainability and Expansion Strategy

Our plans of establishing Tiny Thoughts is basically to test – run the Day care trade. We have decided to start our first outlet in a competitive location like Ohio. Although we don’t have the intention of running chains of day care centers now, but we have plans to set up branches in years to come. It is pertinent to state that we shall not allow our standard operating process to drop so that we do not lose our loyal customers.

Check List / Milestone

• Business Name Availability Check:>Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Obtaining of health permit : Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Purchasing a building and remodeling it: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• writing of business plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, beddings, toys, electronic appliances, office appliances and other equipment: In progress
• Creating Official Website for the day care center: In Progress
• Creating Awareness for the business both online and around the neighborhood of location: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress

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Legal Templates

Home Business 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.

• Management Team

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.

• Lease Agreement
• Power of Attorney
• Non-Disclosure Agreement
• Eviction Notice
• Legal Resources
• Partner With Us
• Terms of Use
• Privacy Policy
• Do Not Sell My Personal Information

The document above is a sample. Please note that the language you see here may change depending on your answers to the document questionnaire.

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Daycare Business Plan

What is a Daycare Business Plan?

A daycare business plan is an equivalent of a roadmap in your business journey. A plan helps you understand what you’re getting yourself into.

It helps you understand the market, figure out where you stand in it, know your target audience better, and formulate better marketing and financial strategies.

Overall, it makes your decision-making process faster and more effective and prevents you from feeling clueless at any point in your business journey.

Moreover, it also helps you get investors and helps your employees and partners understand what your business stands for. It gives the people in your business a feeling that you have a vision and know what you are doing with your business.

Also, you get to set clear goals that give you a direction to work and put your efforts in.

Why is a Daycare Business Plan Important?

Everything you do for your business should add value to it. And here’s how a daycare business plan can add value to your business:

It gives you a sense of direction

There are several ways you can go with each business decision. A business plan helps you understand what would work best for your business then.

Also, it gives a set of tangible goals to look forward to when you work on your business.

It helps you understand your target audience better

Planning your business gives a better form and structure to your research. Which at the end of the day helps you understand your customers better. It also helps you analyze what it means for your business.

Making and upgrading your product or service for your customers serves the biggest purpose at the end of the day.

It helps you understand your competition better

Imagine there’s a popular daycare center in your city and several parents swear by it. Now, this could mean several things for your business.

You’ll have to pick a different location, know the daycare service’s weaknesses and offer better services by working on that area for your business.

You can also pick the things they are doing right, and inculcate the same in your strategies.

A business plan can help you do all of the above and more through a competitive analysis.

It helps you convince your investors

Though making the right prediction is difficult, having a rough idea of your business’s sales and financial potential is important to get investors on board.

Investors want to know the scalability of your business before they invest in it. A good and realistic prediction of returns makes it easier to convince investors.

And a business plan can help you make realistic financial predictions.

It keeps you updated with the latest business trends

A business plan is a living document that grows alongside your business. It also helps you have a foresight of changing trends and act on time for getting the best results for your business.

This also makes it important for you to keep updating your plan as your business grows.

What does a Daycare Business Plan Look Like?

If you are planning to start a new auto or car repair shop, the first thing you will need is a business plan. Use our sample Daycare Business Plan created using Upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new auto repairing shop, spend as much time as you can reading through some examples of Children’s & Pet business plans .

Moreover, business plans come in different forms to fit the current state of your business.

Apart from that, there are a few major sections that should be included in every business plan.

Daycare Business Plan Outline

This is the standard business plan outline which will cover all important sections that you should include in your business plan.

• Executive Summary
• Keys to Success
• Company Summary
• Timothy Bernard Kilpatrick
• Start-up Summary
• Locations and Facilities
• Service Description
• Competitive Comparison
• Sales Literature
• Fulfillment
• Future Services
• Industry Analysis
• Market Segmentation
• Market Analysis
• Market Needs
• Market Trends
• Market Growth
• Business Participants
• Competition and Buying Patterns
• Main Competitors
• Strategy and Implementation Summary
• Value Proposition
• Competitive Edge
• Positioning Statement
• Pricing Strategy
• Promotion Strategy
• Marketing Programs
• Sales Forecast
• Sales Programs
• Strategic Alliances
• Web Plan Summary
• Website Marketing Strategy
• Development Requirements
• Management Summary
• Organizational Structure
• Timothy B. Kilpatrick
• Carolyn Steverson
• Candice Harris
• Management Team Gaps
• Personnel Plan
• Projected Profit and Loss
• Projected Cash Flow
• Projected Balance Sheet

What to Include in Your Daycare Business Plan?

A good daycare business plan consists of a certain number of well-defined sections, the following sections can help you in writing an excellent business plan.

1. Executive Summary

The executive summary section is one of the most important sections of your business plan because it not only forms the first section of your business plan but also acts as a pitch for potential investors who can provide you with funds for your daycare business.

It consists of your company’s vision and mission, its USP, objectives, and also expected revenues.

Writing the executive summary section of your plan at the very end, so you can sum up your plan properly is a good tip to remember.

2. Services

In this section, you should give out a clear idea of what your services are and whom it caters to. You should define your target market, your niche, the area your services will be extended to, etc.

As a daycare center, you should have a clear idea of the age group you will cater to, what is the preferred location of your target audience, how you come off as a service to your customers, and so on.

3. Market Analysis

Market analysis can be of great help to any business, it can help you understand what you are getting yourself into, who your competitors are, what your client base expects out of you, and where you stand in the current market situation.

Hence, market analysis immensely improves your understanding of the industry you are getting into. In the case of a daycare center knowing the best practices of childcare that exist in the market can be of great help.

4. Web Plan

In today’s internet-based world, most busy parents looking for a daycare center online. Hence, having a strong and reliable web presence is crucial to the success of your daycare business. Thus, including a web strategy in your business plan is necessary.

Always remember, as a daycare service coming off as a trustworthy and reliable institution is crucial for your business to work.

5. Management and Organizational Structure

Having a well-structured management system 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 parents or the primary caregivers.

In this section, you should include the structure of your organization, details about people on various levels in your company, a solid system for tracking everyone’s work and progress, the areas your team is excelling at, and the areas your team is lagging in.

6. Financial Plan

One of the chief reasons for several daycare services running out of business is poorly managed finances or running out of funds to keep going.

Planning your finances in the early stages of your business saves you from encountering such a problem later on.

Hence, planning your finances is mandatory while writing a business plan.

Download a sample daycare business plan

Need help writing your business plan from scratch? Here you go;  download our free daycare business plan pdf  to start.

It’s a modern business plan template specifically designed for your daycare business. Use the example business plan as a guide for writing your own.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Daycare Business Plan Summary

In conclusion, apart from having a good image as an organization, a well-managed team, a clearly defined niche, thorough research of the market and an excellent financial plan is crucial to the success of a daycare business.

After getting started with Upmetrics , you can copy this sample daycare business plan into your business plan and modify the required information and download your daycare business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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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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Sample Daycare Business Plan

Writing a business plan is a crucial step in starting a daycare. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring daycare business owners, having access to a sample daycare business plan can be especially helpful in providing direction and gaining insight into how to draft their own daycare business plan.

Download our Ultimate Daycare Business Plan Template

Having a thorough business plan in place is critical for any successful daycare venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A daycare business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The daycare business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your daycare as Growthink’s Ultimate Daycare Business Plan Template , but it can help you write a daycare business plan of your own.

Example – TinySteps Playhouse

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

At TinySteps Playhouse, we are committed to providing exceptional childcare services in the vibrant city of Denver, CO. Our daycare center is designed to offer a safe, educational, and nurturing environment for children ranging from infants to pre-kindergarteners. Our comprehensive curriculum is tailored to meet the developmental needs of each age group, fostering growth and learning through play. With a passionate and experienced team at the helm, TinySteps Playhouse is dedicated to supporting the families in our community by offering flexible care options that accommodate the diverse needs of modern families. Our location in Denver positions us perfectly to serve a growing demographic of parents seeking quality childcare solutions.

Our success at TinySteps Playhouse is anchored in our commitment to providing a nurturing environment that supports the holistic development of children. We have successfully established a reputation for quality care, thanks to our experienced and passionate team, comprehensive curriculum, and flexible childcare solutions. To date, we have achieved several milestones, including the successful launch of our center, consistent positive feedback from families, and a growing enrollment. Our dedication to fostering a supportive and engaging learning environment sets us apart and drives our continued success.

The childcare industry is witnessing significant growth, driven by increasing demand from working parents seeking reliable and quality daycare services. In Denver, CO, this trend is particularly pronounced, with a rising number of families requiring childcare solutions that offer both educational and emotional support. The industry’s expansion is further fueled by growing awareness of the importance of early childhood education, prompting parents to seek out establishments that provide more than just basic care. In response, daycare centers are evolving to offer comprehensive curriculums that encourage cognitive, social, and emotional development. This shift towards more holistic childcare services is reshaping the industry, making it an opportune time for TinySteps Playhouse to establish and expand its presence in Denver.

Our target customers at TinySteps Playhouse are working parents in Denver, CO, who value both the emotional and educational development of their children. These parents are looking for more than just a daycare; they seek a partner in nurturing their child’s growth. They are typically well-educated, middle to upper-middle-income earners who understand the importance of early childhood education and are willing to invest in quality childcare services. Our customer base values the flexible care options we provide, which cater to the diverse needs of modern families. By understanding and addressing the specific needs and preferences of this demographic, TinySteps Playhouse aims to become the go-to childcare solution in our community.

Top Competitors:

• Happy Tots Daycare: Known for its large facility and wide range of extracurricular activities.
• Little Scholars Childcare: Offers a strong educational program with certified teachers.
• Sunshine Kids Academy: Praised for its outdoor play areas and emphasis on physical activity.

Our Competitive Advantages: TinySteps Playhouse stands out in the competitive landscape of Denver, CO, by offering a uniquely tailored curriculum that promotes holistic development. Our passionate and experienced team is dedicated to providing personalized attention to each child, ensuring their emotional, social, and educational needs are met. Furthermore, our flexible childcare solutions cater to the diverse needs of modern families, making us a preferred choice for parents in the area.

TinySteps Playhouse will implement a comprehensive promotional strategy to attract and retain customers in Denver, CO. Our approach includes a robust online marketing campaign leveraging social media platforms like Facebook, Instagram, and Twitter to connect with potential clients by sharing engaging content, testimonials, and educational tips. We will also employ SEO techniques and Google Ads to enhance our visibility online. Additionally, email marketing will keep us in direct contact with interested parents, sharing updates, events, and special promotions. Beyond digital efforts, we will engage in community outreach by partnering with local businesses and schools, sponsor events, and offer special promotions to establish ourselves as a trusted community member. Open houses and free trial days will allow parents and children to experience our daycare firsthand, building trust and demonstrating our high level of care. Word-of-mouth, encouraged through referral discounts, will further amplify our reach. Together, these strategies are designed to establish TinySteps Playhouse as the premier choice for daycare services in Denver.

Our operations at TinySteps Playhouse are centered around key processes that ensure the provision of high-quality childcare services. These include rigorous staff training, implementation of our comprehensive curriculum, and maintaining a safe and nurturing environment for the children. We have outlined several milestones to guide our growth, such as expanding our facility to accommodate more children, achieving specific enrollment goals, and obtaining additional certifications that reflect our commitment to excellence. These operational milestones are integral to our strategy for providing exceptional childcare and education services in Denver, CO.

The leadership at TinySteps Playhouse is comprised of individuals with extensive experience in early childhood education and business management. Our team includes a Director with over a decade of experience in childcare management, an Educational Coordinator who specializes in curriculum development, and a Business Manager skilled in operations and finance. Together, our management team brings a wealth of knowledge and passion for childcare, driving TinySteps Playhouse towards achieving its mission of providing outstanding childcare services in Denver, CO.

Welcome to TinySteps Playhouse, a new Day Care/Daycare that has recently opened its doors to serve our fellow residents in Denver, CO. As a local daycare center, we are acutely aware of the lack of high-quality daycare options within our community. With this in mind, we have stepped forward to fill this crucial gap, providing a nurturing and educational environment for the children in our care.

At TinySteps Playhouse, we offer a comprehensive range of services designed to meet the needs of busy families and their children. Our offerings include childcare, early education programs, nutritious meals and snacks, and ample opportunities for outdoor play and physical activities. We understand the importance of a balanced approach to child development, and our programs are crafted to foster growth, learning, and fun in a safe and welcoming environment.

Located in the heart of Denver, CO, TinySteps Playhouse is perfectly positioned to serve the local community. We are committed to becoming a cornerstone of support for Denver families, providing peace of mind to parents and caregivers while their children are in our care.

Our ability to succeed in this competitive market is grounded in several key factors. Firstly, our founder brings a wealth of experience from previously running a successful daycare, ensuring that TinySteps Playhouse is built on a foundation of proven practices and passion for child care. Additionally, we pride ourselves on offering superior childcare services compared to our competitors, supported by a team of highly experienced staff. This unique combination of experience, passion, and quality positions us to become the preferred choice for daycare services in Denver, CO.

Since our founding on January 5, 2024, as a S Corporation, we have achieved several significant milestones. We have developed our brand identity, including designing our logo and finalizing our company name, which resonates with our mission and values. Furthermore, we have secured an ideal location for our daycare, ensuring that we are accessible and convenient for the families we serve. These accomplishments serve as the foundation for our future growth and success, as we continue to build our reputation and expand our offerings to meet the needs of our community.

The Day Care/Daycare industry in the United States is a significant and growing market. Currently, the industry generates over $56 billion in revenue annually, with an average growth rate of 3.9% over the past five years. This indicates a strong demand for daycare services across the country, making it a lucrative industry for new businesses to enter.

One of the key trends in the Day Care/Daycare industry is the increasing number of working parents in the United States. With more parents entering the workforce, the demand for reliable and high-quality daycare services is on the rise. This trend bodes well for TinySteps Playhouse, as it positions itself to cater to the needs of busy families in Denver, CO. By offering convenient and flexible daycare options, TinySteps Playhouse is well-positioned to capitalize on this growing market.

Another trend in the Day Care/Daycare industry is the focus on early childhood education and development. Parents are increasingly looking for daycare providers that offer more than just basic childcare services, but also enriching educational experiences for their children. TinySteps Playhouse can differentiate itself in the market by emphasizing its educational curriculum and dedicated staff, attracting parents who prioritize their child’s learning and development. With the industry expected to continue growing in the coming years, TinySteps Playhouse has a promising future ahead.

Below is a description of our target customers and their core needs.

Target Customers

TinySteps Playhouse will target local residents primarily, focusing on families with young children in need of daycare services. The community within Denver has a significant portion of dual-income households where both parents work full-time jobs. This demographic is in dire need of reliable and nurturing childcare solutions, making them a primary customer segment for TinySteps Playhouse.

The daycare will also cater to single-parent families seeking a supportive and engaging environment for their children during work hours. Denver’s diverse population includes a notable number of single parents who require affordable, high-quality daycare services. By offering flexible hours and a curriculum that promotes early childhood development, TinySteps Playhouse will meet the specific needs of this customer group.

Moreover, TinySteps Playhouse will tailor its services to attract parents who prioritize educational content in their childcare selection. With an emphasis on learning and development, the daycare plans to integrate educational programs into its daily schedule. This approach will appeal to parents interested in providing their children with a head start in education, further broadening the daycare’s customer base.

Customer Needs

TinySteps Playhouse steps in to meet the critical need for high-quality daycare services that Denver parents desperately seek. Parents expect a safe, nurturing environment where their children can learn, play, and grow under the supervision of caring and professional staff. This establishment ensures that every child receives personalized attention, fostering a sense of belonging and security.

Moreover, TinySteps Playhouse recognizes the importance of convenience for working parents. It offers flexible hours to accommodate the varying schedules of Denver’s diverse workforce. By doing so, parents can maintain their professional responsibilities without compromising their child’s care and well-being.

In addition to basic caregiving, TinySteps Playhouse provides an educational curriculum designed to stimulate young minds and prepare them for future academic success. Parents can rest assured that their children are not only cared for but also engaged in meaningful learning activities. This comprehensive approach to daycare fulfills a critical need for developmental support beyond mere supervision.

TinySteps Playhouse’s competitors include the following companies:

Kiddie Academy of Denver-Boulevard One offers a comprehensive child care program that focuses on early childhood education and development. Their services include infant care, toddler care, preschool, and pre-kindergarten programs. The academy emphasizes a Life Essentials® curriculum, which supports the physical, emotional, intellectual, and social development of children. Price points vary based on the program and age of the child, but they generally fall within the mid to high range of daycare services in the Denver area. Kiddie Academy of Denver-Boulevard One operates primarily in the Boulevard One neighborhood of Denver, catering to families residing in or near this area. They target middle to upper-middle-class families looking for a blend of education and care for their children. A key strength of Kiddie Academy is its national reputation and standardized curriculum. However, its location-specific weakness may be its higher price point, which could be a barrier for some families.

Crestmoor Learning Center provides early childhood education with a focus on creating a nurturing and safe environment for children to learn and grow. Services include infant care, preschool programs, and after-school care for older children. The center adopts a personalized approach to learning, tailoring activities to the developmental needs of each child. Pricing information is typically customized based on the specific needs and schedule of the family, aligning with industry standards in the Denver area. Serving the Crestmoor neighborhood and surrounding areas, Crestmoor Learning Center appeals to families seeking a more intimate and personalized daycare experience. The center’s strengths lie in its community-focused approach and flexible scheduling options. However, its smaller size and limited capacity could be viewed as a weakness, potentially limiting availability for new enrollments.

The Learning Experience – Westminster operates in the broader Denver metro area, with a specific focus on the Westminster location. This center offers educational childcare programs for children ages six weeks to six years, including toddler care, preschool, and kindergarten prep. Their proprietary L.E.A.P. (Learning Experience Academic Program) curriculum is designed to promote cognitive, social, and physical development. While The Learning Experience – Westminster has a competitive pricing structure that aims to be accessible to a wide range of families, they also offer premium features such as a mobile app for parents. This center serves a diverse customer base, including families from various socioeconomic backgrounds. Their key strength is the blend of affordability and technology-enhanced services. A potential weakness is the reliance on a franchise model, which may result in variability in service quality across locations.

Competitive Advantages

At TinySteps Playhouse, we pride ourselves on offering superior child care services that set us apart from our competitors. Our commitment to providing a nurturing and educational environment ensures that every child in our care receives the attention and support they need to grow and thrive. We understand the importance of early childhood development, and our programs are designed to stimulate learning and creativity in a safe and welcoming setting. Our approach is not just about watching over children; it’s about engaging them in activities that promote their social, emotional, and intellectual development.

Another significant competitive advantage we have is our team of highly experienced staff. Each member of our team brings a wealth of knowledge and expertise in child care, early childhood education, and child psychology. This experience allows us to create a supportive and enriching environment for the children we serve. Our staff’s dedication to continuous learning and improvement means that we are always at the forefront of best practices in child care. Parents can trust that their children are in capable and caring hands, receiving the best possible care and education. This level of service and expertise distinguishes us in the Denver area, making us a preferred choice for discerning parents.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

TinySteps Playhouse offers a comprehensive suite of services designed to meet the needs of busy families while providing a nurturing and educational environment for children. At the core of its offerings is Childcare, a service that ensures children are cared for in a safe, engaging, and supportive setting. Parents can expect to pay an average of $250 per week for full-time childcare, which includes a range of activities aimed at promoting the physical, emotional, and cognitive development of children.

Understanding the importance of early education, TinySteps Playhouse provides Early Education Programs tailored to different age groups. These programs are designed to lay a strong foundation for lifelong learning by incorporating elements of play, discovery, and structured learning. The cost of these programs is included in the weekly childcare fee, ensuring that every child has access to quality early education without additional financial burden on the families.

Nutrition plays a crucial role in the development and well-being of children, which is why TinySteps Playhouse offers Nutritious Meals and Snacks as part of its services. These meals and snacks are prepared with children’s dietary needs in mind, ensuring they receive balanced and healthy food throughout the day. This service is also included in the weekly fee, providing peace of mind to parents that their children are not only cared for but also receive proper nutrition.

Recognizing the importance of physical activity in children’s growth, TinySteps Playhouse incorporates Outdoor Play and Physical Activities into its daily schedule. This ensures that children have ample opportunity to engage in physical exercise, enjoy fresh air, and develop their motor skills. Like the other services, this is included in the overall childcare fee, offering a comprehensive approach to child development and care.

In summary, TinySteps Playhouse stands out by offering an all-inclusive package that covers childcare, early education, nutritious meals, and physical activities. With a focus on holistic development and a commitment to providing high-quality services, TinySteps Playhouse is positioned as a premier choice for families seeking the best care and education for their children in Denver, CO.

Promotions Plan

TinySteps Playhouse will utilize a comprehensive promotional strategy to attract customers in Denver, CO. At the heart of this strategy lies a robust online marketing campaign. The daycare will leverage social media platforms, such as Facebook, Instagram, and Twitter, to connect with potential clients. Through these channels, TinySteps Playhouse will share engaging content, including day-to-day activities, testimonials from satisfied parents, and educational tips for children. This approach not only builds a community around the daycare but also showcases the quality and care provided. Furthermore, the daycare will implement search engine optimization (SEO) techniques to improve its visibility in search engine results. By targeting keywords related to daycare services in Denver, TinySteps Playhouse will attract parents actively searching for childcare options. Additionally, the daycare will use Google Ads to reach a wider audience, ensuring that parents searching for daycare services in the area encounter TinySteps Playhouse at the top of their search results. Email marketing will also play a crucial role in the promotional strategy. TinySteps Playhouse will collect email addresses from interested parents through its website and social media channels. The daycare will then send out regular newsletters featuring updates, events, and special promotions. This direct line of communication will keep TinySteps Playhouse top-of-mind for parents considering daycare options. Beyond online marketing, TinySteps Playhouse will engage in community outreach. The daycare will collaborate with local businesses and schools to sponsor events and offer special promotions. These partnerships will not only increase visibility but also establish TinySteps Playhouse as a trusted community member invested in the well-being of local families. To further attract customers, TinySteps Playhouse will host open houses and free trial days. These events will allow parents and children to experience the daycare firsthand, meet the staff, and see the facilities. Such experiences are invaluable in building trust and demonstrating the high level of care and education that TinySteps Playhouse provides. Word-of-mouth will also be a vital component of the promotional strategy. Satisfied parents are the best advocates for TinySteps Playhouse. The daycare will encourage referrals by offering discounts or special offers to families that bring new clients. This approach not only rewards current customers but also harnesses the power of personal recommendations. In conclusion, TinySteps Playhouse will deploy a multifaceted promotional strategy to attract customers. By combining online marketing, community outreach, and word-of-mouth, the daycare will establish a strong presence in Denver, CO. These efforts will ensure that TinySteps Playhouse becomes a preferred choice for parents seeking quality daycare services.

Our Operations Plan details:

• The key day-to-day processes that our business performs to serve our customers
• The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of TinySteps Playhouse, there are several key day-to-day operational processes that we will perform.

• Opening Procedures: Staff arrive early to prepare the facility, ensuring that play areas are clean and safe, and that all necessary materials for the day’s activities are ready and accessible.
• Health and Safety Checks: Conduct daily health checks of all children upon arrival to monitor for any signs of illness, and ensure that all play equipment and toys are sanitized and in good condition.
• Attendance Tracking: Accurately record the arrival and departure times of children to maintain an up-to-date attendance log for safety and billing purposes.
• Meal and Snack Preparation: Prepare and serve nutritious meals and snacks at scheduled times throughout the day, adhering to any dietary restrictions or allergies.
• Educational Program Implementation: Execute planned educational activities and programs that stimulate cognitive, social, and physical development, adjusting as necessary to meet the needs of different age groups and individual children.
• Continuous Supervision: Maintain constant supervision of children to ensure their safety and well-being, intervening as necessary to guide behavior and facilitate positive interactions among peers.
• Communication with Parents: Provide regular updates to parents about their child’s day, including any notable achievements, behavior observations, and any incidents or accidents that occurred.
• Cleaning and Maintenance: Perform regular cleaning of the facility throughout the day, with a deep clean at the end of the day, to maintain a hygienic environment. This includes laundering of any used fabrics and sanitizing toys and equipment.
• Staff Coordination: Conduct briefings with staff at the start and end of each day to ensure everyone is informed about the day’s schedule, any special needs of children, and to discuss any issues that may have arisen.
• Financial Management: Process payments from parents, manage billing inquiries, and ensure accurate financial records are kept for accounting purposes.
• Professional Development: Encourage staff to engage in ongoing professional development and training opportunities to stay current with best practices in early childhood education and care.
• Emergency Preparedness: Ensure that all staff are trained in emergency procedures and that emergency contacts for each child are readily accessible. Conduct regular drills for different types of emergencies.

TinySteps Playhouse expects to complete the following milestones in the coming months in order to ensure its success:

• Securing a Suitable Location : Find and lease or purchase a facility in Denver, CO, that is safe, accessible, and compliant with state and local regulations for childcare services. This location should also offer potential for growth and expansion.
• Obtaining Licenses and Permits : Complete all necessary state and local licensing requirements for operating a daycare. This includes passing health and safety inspections and obtaining a childcare license.
• Building and Equipping the Facility : Renovate and equip the facility to meet the needs of children of various ages, including purchasing educational toys, furniture, outdoor play equipment, and safety features. Ensure that the environment is inviting, stimulating, and secure for children.
• Hiring and Training Staff : Recruit, hire, and train qualified childcare providers who are passionate about child development. Staff training should focus on health and safety protocols, educational strategies, and emergency procedures to ensure a high-quality care environment.
• Developing Curriculum and Activities : Design a comprehensive, age-appropriate curriculum that promotes physical, emotional, social, and cognitive development. Plan a variety of engaging activities and routines that cater to the interests and needs of children.
• Launching Marketing and Enrollment Campaigns : Implement targeted marketing strategies to attract parents and guardians in Denver, CO. Develop an attractive website, engage in social media marketing, and host open house events to facilitate enrollment.
• Launching Our Daycare : Officially open TinySteps Playhouse for business, welcoming children and their families. Ensure a smooth operation from the first day, with staff ready to provide high-quality care and education.
• Monitoring and Improving Quality : Establish mechanisms for regular feedback from parents and staff to continuously monitor and improve the quality of care and education provided. Implement changes as necessary to meet the evolving needs of children and families.
• Reaching $15,000/Month in Revenue : Through effective marketing, quality service, and word-of-mouth referrals, steadily increase enrollment to reach the milestone of $15,000 in monthly revenue. This financial stability is crucial for covering operating costs and planning for future growth.
• Evaluating Expansion Opportunities : After establishing a successful operation in Denver, CO, assess the feasibility of expanding TinySteps Playhouse to additional locations or offering new services to meet the needs of the community and drive further growth.

TinySteps Playhouse management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Mason Clark, President

Mason Clark, President, brings a wealth of experience and a proven track record of success to TinySteps Playhouse. With a strong background in early childhood education and management, Mason has previously steered a daycare center towards operational excellence and growth. His expertise lies in strategic planning, staff leadership, and implementing innovative programs that enhance the learning and development of young children. Mason’s ability to drive business success, coupled with his passion for creating nurturing and educational environments for children, positions him as a key asset in guiding TinySteps Playhouse towards achieving lasting success.

TinySteps Playhouse requires significant funding to reach our growth goals and fulfill our mission of providing top-tier childcare services in Denver, CO. Our financial plan outlines the need for investment in facility expansion, curriculum development, marketing efforts, and operational enhancements to support our increasing enrollment and ensure the highest level of care. By securing the necessary funding, we will be able to implement our strategic plan, achieve our operational milestones, and continue to serve the families in our community with excellence.

Financial Statements

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Income Statement

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Cash Flow Statement

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Daycare Business Plan Example PDF

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• Lawn & Garden

How to Start a Lawn Care Business: A Step-by-Step Guide for Budding Entrepreneurs

Self-starters who want to learn how to start a lawn care business can follow these 11 steps to help create a lawn care business sure to grow..

By Amber Guetebier | Updated Mar 19, 2024 5:30 PM

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When it comes to types of businesses an entrepreneur can start, opting for a lawn care business can be full of benefits. Overall, lawn care business start-up costs are relatively low and the industry has the potential for high revenue; some lawn care businesses can bring in six figures annually. Add to that the perks of independence and spending time outdoors, and starting a lawn care business becomes even more appealing. To offer customers individualized, reliable lawn care, the best lawn care services start with a comprehensive, executable lawn care business plan. Those interested in starting a lawn care business will find the steps listed can help them on their path to a flourishing lawn care business.

Before You Begin…

When entrepreneurs are researching how to start a lawn care business, there are a number of key factors to take into consideration. Before launching a new venture, aspiring business owners will want to consider any existing lawn care businesses in their marketplace, what those businesses have done to be a success, and how a new lawn care business can compete.

In many locations, lawn care isn’t a year-round business, so taking the weather and climate into consideration will help an entrepreneur formulate the right plan. Many lawn care businesses offer winter snow or ice removal in areas with heavy snowfall. Those with milder winters may be able to work nearly year-round if they plan to offer lawn care preparation and seasonal cleanup as part of their services.

Tips for Starting a Lawn Care Business

• Create a well-researched business plan and set a budget.
• Decide on a business structure, such as sole proprietorship or limited liability company (LLC).
• Research required licenses and permits, such as those required for pesticide application.
• Invest in necessary equipment and software.
• Create a targeted marketing plan to create brand awareness and reach a wider client base.
• Recruit and hire employees to help the lawn care business scale.

STEP 1: Write a comprehensive lawn care business plan.

Writing a business plan is a logical first step for any entrepreneur, and it’s no different for a lawn care business. In order to create a robust, actionable business plan for lawn care companies, the owner needs to start off with market research and make decisions about the scope of the lawn care business they want to run. Many lawn care companies begin as a small lawn care business but may scale into a larger operation, so thinking about company structure is important. For example, will this be an LLC or a sole proprietorship? Is the goal to be a solo operation or to eventually become a franchise? A strong lawn care business plan includes a list of the equipment and tools the owner will need from the start, the start-up and operational budget for the business, and a marketing plan that includes outreach to let new customers know that the business is up and running.

STEP 2: Choose a business structure and register your business name.

There are several different structures an entrepreneur can choose for their business, including a sole proprietorship, a partnership, a corporation, an S corporation, or a limited liability company (LLC). For each of these structures, there are different requirements to register with the state or local government. Business structure affects taxes, paperwork requirements, personal liability, and where potential funding comes from. Aspiring entrepreneurs will want to consider their lawn care business structure carefully, as choosing to restructure in the future may come with restrictions and complications. The U.S. Small Business Administration (SBA) website offers business owners information to help them determine which structure is best for their company. Entrepreneurs can also choose to work with a professional to register their business; for example, they may choose to work with one of the best LLC services , such as LegalZoom or Northwest Registered Agent , to register their business as an LLC.

STEP 3: Get the necessary business licenses and permits as required by your state or local government.

Business owners typically need to register their lawn care business name with state and local governments. They’ll also want to consider the adjacent states where the company may conduct business and research whether the business needs to be registered there as well. Generally, if the company is an LLC, corporation, or partnership, the business owner may be required to register in any state where the company will regularly conduct business. Business names do not need to be registered on a federal level, but paying taxes to both state and federal tax agencies is a requirement.

In addition, the business owner will likely need to get a business license , though the specifics will depend on their location. There are a number of different types of business licenses , and new lawn care business owners will want to research what licenses are required in their area. For example, some states may only require a general business license for lawn care companies to operate legally. Others, however, may require lawn care businesses to obtain special pesticide application certification or permits.

STEP 4: Obtain business insurance coverage.

Lawn care companies frequently work with equipment such as riding lawn mowers or rototillers on clients’ property. They may work on drainage and irrigation as well as lawn care and maintenance. Because of this, purchasing the best insurance for lawn care businesses (such as a policy from NEXT Insurance or Thimble ) is a critical investment for any lawn care business. In many cases, a certain amount of insurance coverage is required by law in order for a business to acquire a license and operate legally in the state in which it’s located.

The good news is, the cost of lawn care business insurance is relatively affordable, with the national average at about $45 a month. Having lawn care business insurance can help protect the company in the event of an accident, damage to a client’s property, injuries to a client, and in some cases, stolen or damaged equipment.

STEP 5: Get financing and open a business bank account.

The national average lawn care business start-up cost is $6,900, which includes a business license, taxes, insurance, equipment, and operating supplies. This amount can fluctuate depending on location, existing equipment, and other factors such as number of employees and vehicles. Commercial lawn care companies may need to invest in larger and more powerful equipment, such as one or more of the best riding lawn mowers , rather than basic push mowers, and this can be a larger investment up front. Creating and finalizing a budget, possibly with the help of an accountant, will help a business owner see the profit they need to succeed and help secure the right amount of financing. It’s also essential to have a business bank account to help manage income and outgoing expenses.

STEP 6: Invest in software to help run and organize the business.

With so many moving parts involved in starting a lawn care business, investing in accounting or other business management software can provide a new business owner with the support they need to manage the daily operations of a lawn care business, including scheduling, invoicing, and budget tracking. The best lawn care scheduling software programs (such as Jobber ) can help address the specific needs associated with operating a lawn care business.

STEP 7: Purchase quality lawn care tools and equipment. 

Starting a lawn care business requires a business owner to invest in certain types of equipment, not the least of which is a lawn mower. Purchasing the best lawn mowers will help any new lawn care business operate successfully. If the lawn care company will operate as a commercial business, with clients that could include golf courses, sports stadiums, or parks, the owner may want to consider larger mowing equipment such as a zero-turn or tractor-style riding lawn mower . Riding lawn mowers are a greater initial investment, but they enable the lawn care business to serve more clients in less time. Entrepreneurs will want to keep in mind that some equipment, such as rototillers or skid-steer loaders, can be rented on an as-needed basis until the business grows.

“Investing in quality equipment and tools will allow you to apply [lawn care products] faster and more efficiently while putting less wear and tear on your body,” says Mark Marino, owner of Lawn Phix , a lawn care company based in Bellingham, Massachusetts. “I now primarily use a ride-on spreader/sprayer with a walk-behind fertilizer spreader and two battery backpack sprayers (one for herbicides and one for liquid nutrition). This setup has instantly doubled the number of properties I complete daily…compared to [using] the push spreader and battery backpack sprayer alone. Plus, I’m less tired at the end of the day, and it’s a lot of fun to ride around, too.”

STEP 8: Invest in top-quality lawn care products.

In addition to having quality tools, a new lawn care business will need to have a selection of quality lawn care products, such as fertilizer, weed control, and pest control products. Lawn care businesses can keep these types of products on hand to make it easier to maintain and beautify clients’ yards.

There are several factors for aspiring lawn care business owners to keep in mind while researching the best lawn care products for their company. First, they’ll want to consider safety. There is a lot of value in choosing a company that offers environmentally friendly products, and doing so could give a lawn care company an edge against the competition if other companies in the area aren’t using eco-friendly products. Second, they’ll want to think about the reputation of the company providing the lawn care products they’re considering. Entrepreneurs can research the different brands available, asking local companies what products they recommend and reading reviews on the effectiveness of each type of product.

Lawn care products are a critical component of any lawn care business, so it’s vital that an entrepreneur include them in their budget and shop around to find the best products for their money.

STEP 9: Choose and price the services your lawn care business will offer.

It’s common for many lawn care companies to offer up-front pricing on their website and on flyers or advertisements. By researching the lawn care cost in the area in which the lawn care business will operate, new lawn care companies can remain competitive in their local market. The national average cost for lawn care services is $124, with a range between $48 and $206. Pricing can be dependent on many factors including geographic location, frequency of service, lawn size, and any additional services the lawn care business will offer, such as pesticide application, additional landscaping services, or seasonal cleanups. In areas with heavy snowfall, many lawn care businesses pivot to offer snow removal and holiday lights installation.

STEP 10: Create a marketing plan to build a solid client base.

A marketing plan is an integral part of cultivating and maintaining a client base. Marketing includes everything from lawn care business cards to a dynamic website. It also includes targeted advertising, such as flyers and door hangers, in neighborhoods businesses wish to serve. The use of social media outreach is also important to build brand identity and interact with customers.

Another way for a lawn care business owner to get more clients is to tap into their existing customer base. “Something that’s worked really well for us is simple word-of-mouth advertising,” says Jeremy Yamaguchi, founder of Lawn Love . “We’ve gathered tons of new customers simply through being recommended by satisfied customers. We make it a habit to always ask our satisfied customers to recommend us after completing a job for them, and we also run lots of promotions where we will offer discounts to people who recommend and get others to do business with us. Lawn care is one of those services that is inherently personable and connection-focused, which is why this has always been an effective approach for us.”

Additionally, entrepreneurs will want to consider purchasing vehicle wraps or magnets with their business name, logo, and contact information and place them on their business vehicles. This helps the business become more visible in the community, which can attract more customers. Finally, business owners can ask their current customers if they can place a yard sign with their business info on the customer’s property—this way, passersby can see the business’s contact information while also admiring their handiwork.

STEP 11: Hire employees to help you run your lawn care business.

While a small lawn care business may start out with a single owner and operator, the workload will grow alongside the client base. In order to effectively scale a business, many lawn care companies will reach a point at which they will need to hire employees. Investigating the average wage and benefits will be a big step in the process for the business owner. Offering employees a fair wage and good benefits will help with employee retention, and it can help ensure trust and loyalty between employer and employee.

“I have seen wages increase steadily over the past 10 years. For instance, an inexperienced crew member started at about $11 per hour in 2014 compared to $18 per hour today,” says Jennifer Nichols, president of GreenWeaver Landscapes in Lenni, Pennsylvania. “Along with wage increases, benefits have grown over the years, and we now offer health and dental insurance, a retirement plan, and liberal vacation and education benefits for all new hires…Landscaping is a skilled profession and our employees deserve a living wage, just like all the other trades. I believe the public is beginning to understand and accept this. This simply means that wages will most likely continue to increase in the near future, and they should.”

When learning the ins and outs of how to start a lawn care business, from writing an initial business plan and securing funding to marketing and hiring employees, entrepreneurs can create a thriving business that helps beautify the neighborhood while earning a living wage. By dedicating the time up front to create a well-researched business plan, the grass really will grow greener.

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Georgia Senate passes bill to loosen health permit rules, as Democrats again push Medicaid

FILE - Southwest Georgia Regional Medical Center in Cuthbert, Ga., shown here on Friday, Oct. 7, 2022, closed in 2020. The Georgia state Senate passed a bill on March 14, 2024, that would let the hospital reopen without a state permit, called a certificate of need. (AP Photo/Jeff Amy, File)

FILE- A man passes Wellstar Atlanta Medical Center in Atlanta on Wednesday, May 20, 2020, before the hospital closed in 2022. The Georgia state Senate passed a bill on March 14, 2024, that would let the historically Black Morehouse School of Medicine open a replacement hospital without a state permit, called a certificate of need. (John Spink/Atlanta Journal-Constitution via AP, File)

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ATLANTA (AP) — The Georgia Senate on Thursday passed a plan to loosen health care permitting that proponents say will create new options for patients, as Democrats made a last-ditch attempt to expand health care coverage for lower-income adults.

Senators voted 43-11 for House Bill 1339, sending it back to the House for more debate. It’s likely to face pushback there from opponents who warn greater competition will undercut rural hospitals by drawing away the best-paying patients.

“It is not a wholesale elimination of certificate of need requirements,” Sen. Bill Cowsert, an Athens Republican, said of the Senate approach. “We’re targeting certain areas where we want to make it easier to provide medical services to Georgians.”

Certificates of need, in place in Georgia since the 1970s, require someone who wants to build a health facility or offer new services to prove an expansion is needed. The permits are meant to prevent overspending that would increase health care costs.

One key sticking point is likely to be whether to let outpatient surgery centers serve multiple medical specialties without a state permit, called a certificate of need. The Senate bill would let physicians from multiple specialties share one surgery center. The House has opposed such a move.

The Senate measure could also allow the historically Black Morehouse School of Medicine to open a hospital in central Atlanta that could provide services once offered by the now-shuttered Atlanta Medical Center . It would also allow a hospital to open without a permit in any rural county where a prior hospital has been closed for more than 12 months. That could allow a hospital in the southwest Georgia town of Cuthbert that closed in 2020 to reopen.

The bill also includes a study committee to examine whether Georgia’s state-federal Medicaid program should be expanded to cover more lower-income adults. Right now, for many adults who make less than than the federal poverty level, or about $15,000 a year, the only option is Gov. Brian Kemp’s Pathways program . It requires adults to prove 80 hours a month of work, study or volunteering. Although hundreds of thousands of Georgia adults below the poverty line are uninsured, only a few thousand have attained Pathways coverage so far.

“Medicaid expansion is what you need to take care of all these folks,” said Sen. David Lucas, a Macon Democrat who introduced a separate expansion bill this year. He voted for Thursday’s bill, saying he wanted negotiators to consider full expansion when they meet to work out differences between House and Senate bills.

While some states have repealed certificate-of-need laws, Georgia is among the majority of states still using them. Incumbent hospitals and health care providers often oppose new developments. Those who dislike the certificates say they prevent needed competition and unfairly protect local monopolies.

“The Senate passed a measure today that would ensure that every Georgian, regardless of where they live, would have an opportunity to access quality care in their community,” Lt. Gov. Burt Jones, a Republican, said in a statement. Jones has advocated for full repeal of the permits

But Democrats say that new medical facilities in underserved areas won’t be able to sustain themselves without more insured patients.

“How does this bill allow a hospital operator, whether it’s 20 minutes from here or four hours from here, to avoid operating at a significant loss under the current mix of uncompensated care?” asked Sen. Jason Esteves, an Atlanta Democrat.

Now in Georgia, physicians can open a surgery center serving only their medical specialty without a permit. The Senate plan doesn’t directly say physicians can open a surgery center that provides medical procedures across multiple specialties. But it does say physicians from different specialties can share operating rooms, which means one building can be used for any procedure. Sen. Billy Hickman, a Statesboro Republican who supported the bill, said surgery centers skim off lucrative businesses from hospitals.

“They are not open seven days a week like our hospital is,” Hickman said. “They’re not open 24 hours a day like our hospital. They don’t have to take everybody that walks in the way our hospital does.”

The Senate plan would also abolish requirements for permits for outpatient birthing centers and imaging centers, which provide X-rays, CAT scans and PET scans.

The bill would let new hospitals be built in counties with less than 50,000 residents, as long as they agree to provide a certain amount of charity care, join the statewide trauma system and provide “comprehensive behavioral health services.”