How to Write a Daycare Center Business Plan

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A good business plan describes how you will provide quality childcare at your daycare center.
A good business plan describes how you will provide quality childcare at your daycare center. (Image: children image by Renata Osinska from Fotolia.com)

If you want to start a daycare business, you need to start by writing a business plan. Business plans outline how your daycare will comply with regulations, attract clients, provide quality service, and generate revenue. A solid business plan is essential to understanding the market and attracting financing.

Things You'll Need

  • Notebook
  • Computer
  • Laser printer

Preparation

Write a few paragraphs outlining your vision for the day care center. Include characteristics that will distinguish your childcare center from other centers, how large the center will be, how many children you will take and what types of facilities you envision. You should also describe your target clientele, looking at categories such as the parents' level of education, income level and family composition and size.

Acquaint yourself with state and local government regulations concerning childcare. For example, you will be required to serve at least one hot meal per day and meet a minimum child to staffer ratio.

Sharpen your understanding of the market. Research other daycare centers in your area to find out what they charge. Find a good location, like a vacant store in a strip mall, a small house, or a church basement. Determine the size and socioeconomic status of your target market.

Writing Your Business Plan

Explain the legal side of your business in the Business Organization section. Include what types of insurance policies you will take out and how you will manage the accounting. Childcare is a heavily regulated business; in this section, list your local regulations and zoning requirements and how your business will conform to these standards.

Detail your management policies in the Management section. List the qualifications of your staff and their wages. List a sample schedule of activities and the supplies you will need to keep the children happy and busy. For example, specify whether you are planning to hire an on-site nurse, education specialists, or accountants.

Describe your marketing strategy in the next section. Explain how you will appeal to the target market, how much you will charge and where your facility will be located. Detail your ideas for promoting your business: whether you will distribute flyers advertising your quality childcare service, put up posters in local businesses or buy billboard space. Parents may feel guilty about leaving their children somewhere else every day. Make sure you explain how your marketing strategy will put parents at ease and assure them that their children will be nurtured and entertained.

Provide a reasonable estimate of your start-up costs and revenue projections. Estimate how long will it take you to break even. Figure out your daily rate per child and if you will offer discounted weekly, monthly or yearly plans. Show how much you plan to spend per child in terms of staff salaries, food and activities. Create graphs and charts to provide visual appeal and to make cost and revenue projections clear to potential investors.

Write your Business Introduction. You can recycle your original paragraphs that outlined your vision for the center into the Business Introduction. Detail your mission statement, the target market, competitors and trends in the industry. For example, if your childcare center is to be located in a residential area, explain how your center's location nearer to home will attract parents reluctant to put their kids in an unknown neighborhood.

Write the Executive Summary last. This is a two-page document summarizing the essential information in your business plan. The executive summary must be sharp and convincing in order to persuade investors to read your whole plan. Be sure to explain what makes your childcare center unique and worthy of investment, be it a commitment to education, a focus on arts and creativity or a home-like environment.

Print your business plan in the following order: the Executive Summary first, followed by the Business Introduction, the Organization section, the Management section, the Marketing Strategy, and the Financial Information. Attach any supporting documents (e.g., your resume, client list, letters of reference, contracts or operating licenses) last. Include a title page and a table of contents.

Tips & Warnings

  • Although many large corporations run their own daycare centers, Power Home Biz notes that parents prefer to use local childcare facilities and find community-based centers most appealing.
  • If you're having trouble breaking even in your projections, consider increasing or decreasing the number of children. Make sure you are using all resources (staff, supplies, etc.) as efficiently as possible without over-stretching.

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