How to Plan a Day Care Budget
The U. S. Census Bureau reports that between 2005 and 2007 more than 50 percent of husbands and wives in married families both work. This large parental workforce places a demand on parents and communities to provide day care facilities for children. With the right interpersonal skills and business acumen, you can operate a successful day care. Creating a workable budget is a crucial first step.
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Instructions
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Build Your Budget
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Use a spreadsheet to create your line-item budget. Type expenditure category items down the left side of the spreadsheet. For example, type "Licenses and Permits," "Office Furniture," "Sleeping Mats" and "Salaries" for category names. Next to each category record the estimated costs for each item.
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Figure in licenses and permits. Check with your city's department of licenses to identify costs associated with filing child care licenses and building permits. Child care licensing fees typically range from $25 to $50. Building registration zoning permit costs are listed with your local zoning department. Business and electrical permits cost about $100 each. Electrical building permits are generally only needed if you have to install electricity; the permits cost about $200. Record each of these expenses on your line item budget. If your local zoning department requires you to renew a license annually, factor these recurring costs into your budget.
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Estimate equipment costs. Spend a day checking prices for equipment at superstores and children's day care furniture discount retailers. Choose the least expensive and most durable equipment. If you plan to put a teacher's office at the day care, check prices at office stores for inexpensive office furniture. Write down the cost of equipment including sleeping mats, small chairs, eating utensils and toys. Consider starting small, caring for a maximum of five children, to keep equipment costs down. As your clientele grows, you can always expand the day care.
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Work with general and specialty insurance providers to discover the monthly cost of liability, caregiver, sexual abuse and molestation, worker's compensation and property insurance. Purchase commercial auto insurance if your day care will operate a van. In some states, in-home day care insurance might cost less than commercial day care insurance. The cost depends on how much equipment and the number of children and teachers that your day care has, combined with the costs of the building. You could pay about $300 to $500 or more a month in insurance premiums.
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Establish annual salaries for all board members, child care workers and any teachers that you hire. Assign one child care worker to every three to five children. For infants younger than 6 months, assign one child care worker to every three infants. The Bureau of Labor Statistics 2008-2009 Occupational Outlook Handbook reports that the average day care worker earns approximately $16,000 a year. If you hire three child care workers and include your salary in the budget, allocate $68,000 to $70,000 for annual salaries and benefits. Larger salaries demand a higher overall budget as this is where most of your expenses will derive from.
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Establish operating costs. Record costs associated with office supplies, paper plates, napkins, wash cloths, bed linens and other frequently recurring expenses. For example, you should include the monthly costs of electric, water, heat and telephone bills in your budget. Purchase food in bulk from discount clubs. Factor in the average total costs of food and beverages on your line item budget spreadsheet.
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