How to Prepare a Daycare Business Plan

  • Business
  • child care

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. 

Why? 

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 free demo of Procare today!

About The Author

Mike Braun

Mike Braun is the Senior Product Marketing Manager at Procare Solutions, where he focuses on product positioning, messaging, competitive differentiation, and enabling the Sales and Support teams to give our customers an exceptional experience.

Ready to get started?

Discover how Procare has helped hundreds of thousands of early childhood professionals streamline child care management.