Childcare owners enter the daycare industry through a variety of routes. Whether you are a seasoned entrepreneur trying to extend your horizons, a business-savvy instructor in the child care field, or a new parent looking to fill a need in your community, the first step to beginning your daycare business is to create a complete business plan.
Let’s be honest for a moment: developing a child care business plan will take a significant amount of time, thought, and energy to complete. However, if you do this stage right, you will set the tone and direction for a successful child care business (ad)venture!
When creating a daycare business plan, keep a timeline of 3-5 years in mind. This level of long-term thinking will act as a road map to your aim of developing a sound daycare business plan in order to open a daycare.
Without further ado, let us assist you in getting started.
Here’s an overview of the nine items you’ll need to create an effective childcare business plan. The following should be included in a child care business plan:
Executive Summary
Business Overview
Description of the Service
Market Research
Marketing Strategy
Operations Strategy
Financial Analysis
Milestones
Support Documents
- Executive Summary
This is your opening statement and “elevator pitch.” Keep it brief, to the point, and to the point.
The executive summary section of your daycare business plan should serve to pique the interest of possible investors and partners in the following important aspects.
This is your opportunity to include:
- A short but “wow!” business description
- Your company’s mission statement
The executive summary is where you may describe what makes your daycare business plan special – is it the location, approach, learning philosophy, child care services, staff, diversity, or something completely new? Don’t be afraid to personalize it!
- Company Overview
This section discusses the structure and concept of your daycare business plan.
Do you intend to be a thought leader in the daycare sector in a certain childcare niche? Is there a Waldorf school? A school that valued multiculturalism? A Montessori-first facility with Reggio influences to prioritize independent learners? Daycares in the home? Or are you looking to establish an empire with the intention of franchising your childcare business model?
A concise introduction should include the following crucial elements:
- The structure of your daycare business
- History of the company
- Services provided
- Success criteria (accreditation, state-focused quality rating)
- Target age group and capacity
- Mid-term business objectives and requirements
- Description of the Service
This section delves into the specifics of what daycare services you will offer to your community and how your company will do so.
Consider the following when writing your business description:
- Standard program offers
- Care can be provided on a full-time or part-time basis.
- After-school care for children
- Capacity of a Child Care Center
- Information about age groups
- Hours of operation
- Unique offers
- Extracurricular activities (yoga, music lessons, languages, gardening)
- Food distribution program
- Design and layout of the room
- Furniture and equipment requirements
- Management and development of facilities
- Plans for expansion
- Do you have a grand idea for your daycare center that needs to be broken down into phases?
- If so, how do these stages appear?
- Will consultants be employed to help with each stage of development? Is this even required?
- Will a board of directors be involved in the decision-making process (NFPs)?
This is the point at which your vision becomes a reality! Consider this section to be your shopping list for creating a successful daycare business plan. Write everything down and solicit comments from your close group.
- Market Research
Market study is a business term for “get to know your surroundings.”
Here’s a list of questions to get you started:
- What is your target audience? (Are they of school age? Parents who work?)
- What are the geographical limits of the client base that your company will serve?
- How many young children and families live in your area? (Do a lot of new young families move in?)
- What types of child care services are in high demand?
- What is the availability of childcare?
- How many daycare centers are there in the neighborhood?
- Where can I find alternative daycare providers?
- How long do waitlists last?
- What kinds of programming and services do other child care centers provide?
- What are the childcare vacancies in the daycare industry like?
- How much does childcare in the neighborhood cost?
- What is the predominant age group in the neighborhood?
- What are the local licensing and regulation requirements for child care centers?
Answering as many of these questions as possible will provide you with a clear image of what you’re getting yourself into and how to differentiate yourself from the competitors.
Let’s go practical for a moment: how can you respond to these questions? Take a spin. Join online parent communities. Facebook groups are excellent resources for learning about what parents and potential customers in your area are discussing, stressing about, enjoying, and prioritizing in their daycare search.
Put simply, spend a lot of time getting to know the people in your target market for your business. The significance of this phase for a solid business plan cannot be overstated. When developing a business case, nothing beats hearing from actual customers in your target market who are facing actual difficulties. Although it looks easy, getting results requires a lot of effort and perseverance.
For your childcare business plan, break this process down into the following five major business categories:
- Recognize your target market
- Determine what your target audience needs.
- Investigate your rivals.
- Identify your unique selling points.
- Put yourself in a position to expand your company
A word on licensing requirements and regulations: Before you start the process of opening your childcare center or franchise, spend some time learning about the center licensing policies and procedures that your local government will apply to you. Verify if you can secure the required licenses for your establishment.
- Marketing Strategy
My favorite section: You need a marketing strategy to advertise and create a big impression for your daycare business now that you have a notion of who you are as a business!
- What sets you apart from other local child care facilities or currently operating daycare centers?
- How can you effectively highlight what sets you apart from the competition?
- What are your first objectives for marketing? Maybe creating a waiting list prior to launch?
- How can your marketing approach help you establish a connection with the families you wish to collaborate with?
You can choose how intricate or basic your daycare’s marketing strategy is to develop. When developing your marketing plan, use creativity and individuality to the fullest. This is a comprehensive post that we wrote about selling your daycare.
- Operations Strategy
Without a team to carry it out, an idea is now just a thought. The foundation of any company is your operations plan. Important items to mention in this section are:
- Who manages the team that you lead?
- Who makes up your core team?
- What does your company’s organizational structure look like?
- Possibilities and requirements for staff training?
- Who are the board members if your childcare is an NFP?
- Does your daycare center have a parent committee that oversees operations if it is a for-profit facility?
Consider this section to be the formation of your A-team. Why did you select particular individuals for their positions? What special contribution do the members of your management team make?
This also makes career growth opportunities and the structure of your team more transparent. Growth should always be considered in every area of your daycare business plan.
- Financial Analysis
You may use all the data you have previously acquired to create a financial strategy for the first few years of your business operations now that you have completed most of the tough lifting.
Recall that launching a business is challenging and that it typically takes three to five years to break even and turn a profit.
The following are the main queries this section should address:
- How much did you spend on the startup?
- How are you going to get money?
- What is the operating budget for the year (revenue & expenses)?
- Create these financial statements using a three-year prediction as a guide:
- income Statement
- Balance sheet
- Revenue Model
- Your current account of income and expenses
- Milestones
I prefer to refer to this final segment as “keeping us honest.” Here is where you and your group will enumerate the objectives you hope to achieve during the course of your daycare business plan. This section will serve as a benchmark when you introduce your daycare business plan, so don’t leave it empty.
A few instances of milestones are:
- Reaching 80% of capacity
- Acquiring NAEYC accreditation
- Reaching the highest ranking in your state QRIS
- Obtaining five-star reviews from parents for your Google profile
- Gaining 100 fans on Facebook in your community
Select the actions that will have the most impact on your childcare business by gathering with your staff.
- Supporting Documents
A list of supporting documents is provided below in case you need it to piece everything together.
- Income and Expense Statement
- Budgetary estimates
- Funding, balance sheets, and income statement
- Each team member’s resume Contracts with outside consultants
- Endorsement letters
- Legal records (articles of incorporation, property records, and daycare licensing)
- Template for a daycare business plan
- Anything more pertinent
You may develop a guide that will aid in the success of your childcare business by taking the time to draft a thorough business strategy. However, after it’s finished, don’t put your business plan in a drawer. Instead, get your hands dirty and update it when your requirements and goals change. Review it every three months or quarters to make sure you’re on track.
The first thing you need to do to start a daycare business is create a business strategy. Having a thorough plan demonstrates your dedication to offering expert, superior services that can positively impact a child’s life.