home daycare business plan example

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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Home Daycare Business Plan [Template + Example in 2024]

Home daycare businesses need a business plan whether they are just starting out or already in operation. Home daycare business plans are essential, especially if you need funding or business partners to grow your business. Ultimately, starting and running a home daycare business takes a lot of resources. Business plans can help you attract partners and secure funding by giving you a credible image.

Therefore, a solid business plan is equivalent to a good start. The plan will assist you in setting goals, knowing how to start, and knowing what measures to take. Creating a business plan with so many sections and terms seems daunting. Our template and example will make it easy for you.

Throughout this article, you'll learn what to include in your business plan for a home daycare. Here are some examples we made to help you understand. With this guide, you'll understand what to write and how to create a business plan for your home daycare business to help it start, run, and maintain.

Without further ado, let's get into it!

How to Write a Home Daycare Business Plan?

Every Home Daycare business plan must have the following sections:

• Executive Summary
• Business Overview
• Products and Services
• Market Analysis
• Marketing Strategy
• Financial Planning
• Operations Plan
• Management Team

Now, let's discuss each section in detail together with examples.

1. Executive Summary

It's always an excellent idea to start with an executive summary when preparing a business plan. This section explains what your business offers in general terms.

The executive summary should include a description of the problem you are trying to solve and your plan for resolving it.

Writing your summary last is advisable once the other sections are finished and settled since it's an overview of the entire plan.

More and more families are now dependent on two incomes, increasing the need for childcare. In addition, the growing demand for safe, educational environments indicates that more kids need them.

The success of Safe Haven Home Daycare depends on providing childcare services to any home within the scope of the business. Our goal is to provide a safe, informative, and enjoyable experience for kids while assisting parents in feeling confident about the care their children receive.

Safe Haven Home Daycare provides the most needed childcare services to any home within a 30-mile radius around Central Islip. The service is available to clients full- and part-time, depending on the necessary working hours.

2. Business Overview

Your business plan contains a Business Overview, which provides general information about your company. Thus, it should include essential information such as your business structure, mission, and values.

You must demonstrate your competitive edge in a Business Overview to attract business investors, funding, and grants. A business plan answers why yours will be better than other businesses and how it will stand out.

In the beginning, the company will be solely owned by its founders, who have the fundamental proprietorship rights for the business.

Depending on the interests of the company and the best way to serve them, the owner may decide that reregistering as a corporation or a limited liability company is best.

3. Products and Services

As its name suggests, your business plan's Products and Services section describes what you offer. If a business's Products and Services Section is detailed, it will be an excellent addition to any business proposal or investment invite.

The process by which your product will be manufactured, sold, or delivered must be explained in detail. Additionally, you can show clients how your services will be delivered. Therefore, you must evaluate your product's position on the market, cost, and suppliers.

The childcare market on Long Island, New York, is one of the most competitive in the country. As a result, the city has more than 300 unique facilities. In general, facilities can be divided into two categories.

Corporate franchise centers often manage the larger franchise centers. This facility offers both regional and national services.

According to current data, 28% of the childcare market is controlled by the top four centers in the United States.

Many colleges and universities operate on a smaller scale and are locally owned and operated. For this reason, Safe Haven Home Daycare services cater to childcare services at home rather than in an institution.

4. Market Analysis

An analysis of the market is another essential component of a business plan. In this section, you will explain how your marketing strategy will be implemented. Using this section to describe your competitors, target market, and marketing strategy is a good idea.

For this reason, this section should contain the following information:

• Competitive Analysis: To determine who your competitors will be
• Customer Analysis: To determine your target audience
• Industry Analysis: To show how the industry is currently doing

There are more than 300 childcare centers in the neighborhood. According to market share, KinderCare has the most. However, they can't cater to families whose kids need home daycare.

They can compete well because of their excellent reputations in the consumer sector. With Safe Haven Home Daycare, clients can enjoy a one-to-one interaction, focusing on their child rather than in school.

In addition, the business keeps childcare rates between five and ten percent lower than the average for major commercial chains.

Children from needy families can get childcare at Safe Haven Home Daycare within a 30-mile radius of Central Islip. Our program accepts part-time and full-time kids.

The facility's efforts to get licenses and certifications give it an edge in the childcare industry. People are subjected to a thorough background check before they're hired.

5. Marketing Strategy

Using the marketing strategy, you can explain to your readers how you plan to market your products. This way, you can explain how to gain and retain customers. You will find information in this section about reaching your target market, motivating them, and making them want to buy your products.

The key differentiator will be customer service benchmarking. Customer-centricity will be infused into the entire organization. Additional funds will be invested in training and attracting the best employees at Safe Haven Home Daycare.

The staff is the one who interacts with the children and their parents. Therefore, their chances of becoming devoted clients and enthusiastic advocates of the facility are excellent in this situation.

Several social media platforms will be used in the campaign, including LinkedIn and Facebook. Professionals will respond to public inquiries about child care. As a result, we demonstrate our competence to the public. Additionally, we will allow customers to leave reviews and communicate with us.

6. Financial Planning

Another part of your business plan you should include is the Financial Planning section. In this part, you will describe your business goals and the process.

Therefore, all possible expenses should be included in a defined timeline. This section aims to demonstrate how you would handle your finances to ensure growth and avoid problems.

Families where both parents work or are required to work are ordinary for children. Therefore, as parents work, they can leave their child at home with someone who can cater to childcare services, teach, and interact for fast learning.

If they cannot be with their children in an emergency, parents must have someone trustworthy they can leave them with.

Our service values the "safe mentality." Our clients appreciate that we have subject matter experts on hand to address their questions. We will not make a special effort to provide advice since we expect people to seek our advice if they need it.

We intend to invest $30,000 in the launch of our business. Our startup costs will also be covered by each owner's contribution of $15,000.

7. Operations Plan

Your business plan's Operations Plan details the entire operation of your business. As such, it should outline the steps your entire staff will follow to ensure you achieve your goals. It is essential to put information about each department employee's daily, weekly, and monthly responsibilities.

Providing quality care to children will generate enormous financial benefits for Safe Haven Home Daycare.

Since Safe Haven Home Daycare will be based on clients' homes, word-of-mouth marketing will make it profitable within the first year. Every six months, the company expects its client base to double in the first 16 months.

Most of the funds will be dedicated to the childcare service providers of the business. This way, they can undergo special training and gain licenses to conduct home daycare services.

Since the client's home will be the place of operations, they can add travel expenses to the bill. It's a safe space for kids, and parents will rest assured of the kids' safety with the licensed providers.

8. Management Team

You should also include a section devoted to your management team in your business plan. The purpose of this section is to summarize the entire staff you currently have and any future staff you plan to hire.

Workers are one of the most vital parts of a business, so anyone reading your plan should know who works there and how they contribute to the company's success.

You should highlight your team's skills, abilities, and experiences to boost your company's credibility.

In addition, you need to demonstrate how you will distribute responsibilities and tasks to ensure each person has an opportunity to grow while maintaining the business's steady development.

Safe Haven Home Daycare will be supervised by seasoned childcare professionals Myrcella Smith and Stephanie Rivers.

Myrcella has eight years of experience in sales, marketing, and management from The Children's House Daycare. During Myrcella's tenure at the company, the company's annual revenue increased from $75,000 to nearly $3.9 million.

Myrcella's partner Stephanie Rivers has a finance and administration degree. Before joining Safe Haven Home Daycare, Natasha worked for The Joyous Place, one of the country's largest childcare providers.

She increased operational profits at The Joyous Place by 112% during her tenure as Chief Financial Officer, which is uncommon for a company in this field.

Home Daycare Business Plan PDF

Do you want to download a Home Daycare business plan example in PDF?

Here is the download link.

Let us know if you have any questions!

Home Daycare Business Plan FAQs

Below are some of the frequently asked questions you may have about Home Daycare Business Plans:

What Is a Home Daycare Business Plan?

Home Daycare business plans showcase the entire structure, function, goals, and any other information relating to a particular business.

Home Daycare business plans present the business's problems, solutions, and functions. In addition, your business plan can provide detailed information about your company, attract investors, and secure funding.

The business plan shows the company's structure and operations. The report also describes the operation's finances, marketing, and management.

The cost of operating a business, market research, mission statements, and succession plans can all affect the launch of a business. Therefore, these things should be clearly stated in a business plan.

Why Is a Home Daycare Business Plan Important?

Home daycare businesses must have a business plan. It outlines a company's goals and structure as a business plan. Moreover, once you have an outline for your project, you can adjust it as needed.

A home daycare business plan would be helpful if you want to hire and train staff, seek investors, or adjust your pricing strategy. Even if your business has yet to launch, you should create one.

Is Owning a Home Daycare Profitable?

The need for home daycare businesses is always present. In this regard, owning a home daycare business is a business that has a vast potential for success and growth.

The key to being profitable is to plan, execute, and maintain your business efficiently. As a result, it's crucial to have an effective business plan to set you up for success.

Our business plan template can help you create a plan that suits your home daycare business. You'll enjoy a profitable home daycare business if you create an effective plan and execute it well.

Home daycare business plans are essential for anyone planning to open one. With such a plan, you can identify your strengths, analyze your competitors, identify your target audience, attract potential customers, and set a goal for success. Moreover, if you need funding, a solid business plan can help you secure grants or investors.

The Home Daycare Business Plan template includes all the necessary information and elements. Using the examples we provided, you can develop your business plan.

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Home Daycare Business Plan

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Do you love children? Do you want to do something that really matters? Maybe home daycare for you. Check out this home daycare business plan and see if it’s financially viable. If you want to run a home daycare , start there.

Working from home can be awesome. Being able to stay home with your own children is a blessing too. Being your own boss and setting your own hours and pay are great too. If you love that idea and you are a kind and patient person with lots of empathy for others, home daycare might be a great plan for your life.

For more about how to start a home daycare click here.

For a downloadable printable home daycare business plan worksheet , click here.

Home daycare is going to be growing by leaps and bounds after the year we’ve gone through so far. There is going to be a huge need for daycare since many small businesses folded this year. Home daycare is a special type of business that has fairly low overhead and is customizable to put your own personal spin on what you do.

I don’t agree with most people’s ideas of how to teach kids. I have my own brand of teaching. I march to the beat of my own drum. I’m very passionate about why I choose to teach my kids the way I do and I want to be able to chart my own waters. This isn’t possible with working for someone else.

Giving my kids the very best of me is the number one reason why I love working for myself. I get to study, learn, and do my very best for my families.

Home daycare is fun! There is a lot of hard work, little respect, and lots of messes. But it’s also different every day. You never get bored because you don’t know what you’re going to get. You get to set the tone of your environment. It’s a great place to be.

The first step in starting a home daycare is to find out about how to get licensed of what the rules are for your area. Click on the highlighted text to see more about whether a license is required. Once you determine that, it’s time to do some other research to find out if home daycare is a viable income for your family.

A big part of the cost of providing care will have to do with the regulations you have to follow. Some licenses cost. Some are free. Some states require a substantial expense in getting your home up to code. Some have very few requirements.

Some things you may have to change is fencing, hiring staff, meeting fire regulations, getting medical exams, and acquiring more education, training, or certificates.

Also, consider local zoning laws. Do you rent? Is your landlord okay with a home daycare in their property? Do you own? Is there a homeowner’s association? Do they allow businesses in the neighborhood? It’s important to consider your neighbors for sure.

Daycare business plan

Now that you know if you can open, you need to consider what you can make. Look at existing facilities, homes, and centers in your area. What do they charge? What do they offer? What do you want to offer? Do you plan to have a specialization that you can charge more for?

How many children will you be allowed to keep and of what ages? In Oklahoma, we can keep 7 kids over the age of 2. We can keep 6 kids if 3 are under 2. We can keep 5 if they are all under 2. So, a big determination in how many kids you can keep is what age of children need care in your area and what ages you will enjoy caring for. I LOVE babies, but I don’t love keeping them 10 hours a day. I like to run and play and do activities. I don’t want to hold an infant all day. So, I don’t keep them. For 20 years, I kept all ages from birth to 12, but over the years, I scaled back.

As I got older, it was more difficult to do everything for everyone, so I changed some of my home daycare rules to suit me better at the age I am now. Believe me, home daycare is far easier when you are 24 than when you are 49. I promise!

Now think of your location. Is it a good area that people will be happy to take their kids to? Or will you have a more difficult time getting clients in that area because of some stigma? In my town, there is an east and west side. For some reason, people think the west side is bad. There are good and bad areas on both sides, but home daycares on the west side always struggle. It’s a stigma, not a real problem. But it does affect business.

When doing your research, find out if there are some gaps in care that many people need. Here there is ALWAYS a big need for very young infant care. None of our centers in town take kids under 10 months. And there are always lots of babies being born. If you wanted to open an infant only facility, it would do well.

You could also specialize in early morning or late-night care. What about weekends? Lots of people here work shift work and they need good care at night. Find out who provides what and what people need. You can look on Facebook and find out what people are asking for. You can ask in a community group or a mom group. You can ask the principle and the electuary school what they have heard.

Is afterschool care with transport from the school a huge need? That could be your niche. Think about providing care during all the school breaks but most of the year only doing it for an hour or two after school? There’s always a great need for that. If you like older kids and like helping them with homework, you could be a godsend to many families.

In our state, we have resource and referral agencies that can provide this information to you all in one place. You can ask if you have anything like that when you contact your licensing agency for regulations in the beginning.

Now to make a specific business plan.

Home daycare salary

How many children will you care for? What will be the minimum and maximum age you’ll take? Will you charge a different price for different ages? What time will you be open? Will you provide all meals for children? Will you provide diapers and wipes? Will you need to hire staff to help you? What about an accountant or bookkeeper? Housekeeper? Lawn service? Think about all the expenses you may have because you’ll be busy working with kids so many hours a day.

Next, you need a name and a philosophy. Potential parents will want to know your ideals and what you stand for. What are your beliefs about providing care? Will you be play-based? Montessori? Nature-based? Have a strict school readiness goal?

You’ll also need policies and a contract . This is a super important step in your business plan. You may be tempted to skip it, but don’t. You will regret it.

Next, you’ll need a budget . You can use this printable business plan to record all the information you’ve collected and figure out what your budget might be. You’ll have to consider start-up expenses and must-have items to work. And you’ll also have to consider the price of every day supplies such as food, replacement toys, repairs, paper products, and so on.

There are other expenses or charges you may not think about such as are listed below.

Charges for families:

• Registration fees
• Waitlist fees
• Supply fees
• Curriculum fees

Expenses for you:

• Construction costs
• Software costs
• Training costs
• Bank charges

Then you’ll have to figure out the income you’ll be making. What will you charge per child and how many children? Figure up your potential earnings and add it to the printable business plan to come up with your home daycare salary.

Check out what home daycare essentials you really need here.  

Home daycare insurance

Don’t forget about home daycare insurance. Obviously, you’ll have to have homeowner’s insurance and auto insurance for your vehicles, but did you know that neither of those covers your business?

Many insurance companies won’t offer it, so you’ll have to look around. If you can’t find any, ask around to other home daycare providers and see if any of them have a suggestion.

Lastly, before you can open, you’ll have to find a way to market your home daycare. Check out these advertising ideas to get you started.

Home daycare website

Don’t forget if you want to make a daycare website to advertise and share information with your clients about what’s going on at daycare, you’ll need to figure in the cost of that as well. You can get wonderful website design help and custom made forms from daycare time solutions here. 

Get your home daycare business plan worksheet here.

Get your home daycare menu planning guide here.

Get your home daycare licensing checklist here.

For a planner made JUST for home daycare providers , this jewel will help you get all of your business organized-AND, it’s gorgeous! There are tons of great provider helps on this site. I wish resources like these ladies have were available when I started. There was no help for home daycare providers back then. But don’t forget to always take care of yourself so you can take care of others!

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A great resource. Thank you so much for sharing.

Thank you for checking it out!

Daycare Business Plan Template & PDF Example

• September 4, 2024

Creating a comprehensive business plan is crucial for launching and running a successful daycare. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your daycare’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a daycare business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the service industry, this guide, complete with a business plan example, lays the groundwork for turning your daycare business concept into reality. Let’s dive in!

Our daycare business plan is thoughtfully developed to encompass all crucial aspects required for an in-depth strategic plan. It outlines our facility’s operations, marketing strategies, market dynamics, competitors, management team, and financial projections.

• Executive Summary : Offers an overview of your Daycare’s business concept, including the innovative learning environment, market analysis , management team, and financial strategy.
• Building & Location: Describes the Daycare’s modern, child-friendly design, its central location, and amenities such as indoor and outdoor play areas, sensory rooms, and nap zones.
• Pricing & Educators: Lists the services provided by your daycare, including full-time and part-time care options, the educator-to-child ratio, and pricing structure.
• Key Stats: Shares industry size , growth trends, and relevant statistics for the Daycare market.
• Key Trends: Highlights recent trends affecting the childcare sector, such as the increasing demand for early childhood education programs and technological integration.
• Key Competitors: Analyzes main competitors nearby and how your daycare differs from them, focusing on aspects like curriculum quality and additional services.
• SWOT : Strengths, weaknesses, opportunities, and threats analysis tailored to the daycare business.
• Marketing Plan : Strategies for attracting and retaining customers, including branding, local advertising, online presence, and community involvement.
• Timeline : Key milestones and objectives from the initial setup through the first year of operation and beyond.
• Management: Information on who manages the daycare, detailing their roles, experience in early childhood education, and business management.
• Financial Plan: Projects the daycare’s 5-year financial performance, including revenue projections, profit and loss statements, cash flow analysis, and balance sheet, aiming for significant growth and profitability by the target year.

Daycare Business Plan Template (Download)

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary serves as the gateway to your daycare business plan, providing a succinct overview of your daycare center and its offerings. It should highlight your market positioning, the variety of child care and educational services you provide, its location, size, and a sketch of daily operations.

This section should also delve into how your daycare will integrate into the local community, including an analysis of the number of direct competitors in the area, identifying who they are, along with your daycare’s distinctive features that set it apart from these competitors.

Moreover, you should incorporate details about the management and co-founding team, outlining their roles and contributions to the daycare’s success.

Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be included here to offer a clear vision of your daycare’s financial strategy.

Daycare Business Plan Executive Summary Example

Business Overview

In the  business overview  section of a daycare’s executive summary, it’s vital to present a comprehensive picture of the daycare’s operations.

This includes the facility’s location, size, amenities, the qualifications of the educator team, child capacity, and pricing structure. Key aspects to highlight are the features that contribute to a nurturing and educational environment, such as indoor and outdoor play areas, sensory rooms, and nap zones. The qualifications and number of educators are crucial for ensuring quality care and education.

This section should also outline the daycare’s capacity to accommodate children and the  pricing strategy , reflecting its commitment to providing accessible and high-quality childcare services.

Example: Little Explorers Daycare, located in [Location/City/Neighborhood], spans 5,000 sq. ft. and offers a stimulating learning environment with dedicated play and learning zones. The daycare boasts a team of 5 certified educators, ensuring a low child-to-educator ratio. Licensed for up to 60 children, the facility provides flexible childcare options with competitive rates, catering to the needs of the community.

Market Overview

The  market analysis  section should include an assessment of the childcare industry’s size, growth trends, average costs, and key  market trends .

This part of the executive summary is crucial for understanding the industry’s dynamics and the daycare’s position within it. Trends such as the rising demand for early childhood education programs and employer-sponsored daycare benefits are important to highlight, as they indicate evolving consumer preferences and potential growth areas. An analysis of the  competitive landscape  is also vital for identifying the daycare’s unique selling points and potential areas for differentiation.

Example: The US childcare market, valued at $60.4 billion, is characterized by its essential demand for quality services. With approximately 600,000 daycare centers nationwide, Little Explorers Daycare competes in a robust market. Its focus on specialized curriculums and child development tracking sets it apart in an industry where differentiation is often based on curriculum quality and additional services.

Management Team

This section introduces the key figures leading the daycare, highlighting their educational background and experience.

The management team’s expertise in early childhood education and business management is critical for the daycare’s operational success and strategic direction. This part of the summary should instill confidence in the team’s ability to provide high-quality childcare and effectively manage the business.

Example: The Director, a co-founder with a Master’s in Early Childhood Education and 10 years of teaching experience, oversees the educational program. The Business Manager, also a co-founder with an MBA and expertise in entrepreneurship, handles the operational and financial aspects of the daycare.

Financial Plan

The financial plan overview provides insight into the daycare’s financial goals and projections.

This section outlines the revenue targets and profit margins, reflecting the daycare’s financial health and potential for profitability. It includes specifics such as aiming for $1.9 million in yearly revenue and an 18% profit margin by 2028.

This section should demonstrate how the daycare plans to achieve these financial objectives through strategic enrollment growth, operational efficiency, and quality service provision.

Example: Little Explorers Daycare aims to achieve $1.9 million in annual revenue with an 18%  EBITDA  margin by 2028. This goal will be supported by expanding enrollment, maintaining high standards of childcare, and implementing efficient business management practices to optimize costs and enhance revenue.

For a Daycare, the Business Overview section can be effectively divided into 2 main components:

Building & Location

Briefly describe the daycare’s facility, focusing on its safety, child-friendly design, and the stimulating environment that it offers to children.

Mention the daycare’s location, emphasizing its accessibility and the convenience it brings to parents, such as proximity to residential areas or ease of drop-off and pick-up. Explain why this location is beneficial in drawing your target clientele, particularly parents who prioritize convenience and safety in their choice of daycare.

Pricing & Educators

Detail the range of childcare and educational services provided, from basic care for infants to preschool programs and after-school care for older children. Outline your pricing strategy , ensuring it aligns with the quality of care and education provided and is competitive within your market segment.

Highlight any special programs, discounts for siblings, or membership deals that offer additional value to families, fostering long-term relationships and loyalty among your clientele. Discuss the qualifications, experience, and approach of your educators and staff, underlining their role in creating a nurturing and educational environment for the children.

Industry size & growth

In the Market Overview of your daycare business plan, start by examining the size of the childcare industry and its growth potential. This analysis is crucial for understanding the market’s scope and identifying opportunities for expansion, particularly in regions with increasing numbers of working parents or areas underserved by quality daycare facilities.

Key market trends

Proceed to discuss recent market trends , such as the growing demand for early childhood education, the importance of developmental programs, and the preference for daycares that offer flexible hours and holistic child development approaches.

For example, highlight the need for services that cater to different developmental stages and incorporate educational curriculums, alongside the rising popularity of daycares that focus on sustainability and health, such as offering organic meals or eco-friendly play areas.

Competitive Landscape

A  competitive analysis  is not just a tool for gauging the position of your daycare in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your daycare’s unique selling points, essential for differentiating your business in a competitive market.

In addition, competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Identifying and Categorizing Competitors

Initiate the competitive analysis by cataloging various local childcare services. Beyond traditional daycare centers, include in-home childcare providers, preschools, Montessori schools, and specialized educational programs focused on early childhood development. Also, consider alternative childcare solutions like nanny services or after-school programs, as they might indirectly compete for parental trust and enrollment.

Leverage digital platforms and online tools to map out the geographical presence of these competitors. Extract insights from customer reviews available on platforms such as Google Reviews, Yelp, or dedicated childcare review websites. Positive reviews highlighting a competitor’s dedicated staff or emphasis on a nurturing environment signal  strengths  in their service offerings.

Daycare Competitors’ Strategies

A meticulous examination of various aspects of competitor operations is imperative:

• Educational Philosophy and Curriculum:  Evaluate the educational approach and curriculum structure. A daycare center with an emphasis on bilingual education or a holistic developmental approach might attract parents seeking specialized learning opportunities for their children.
• Staffing and Qualifications:  Assess the qualifications and certifications of daycare staff. Highlighting a team of experienced and well-trained early childhood educators can be a significant competitive advantage in assuring parents of quality care and education for their children.
• Pricing Models and Services:  Conduct a comparative analysis of pricing models and the spectrum of services offered. Does a competitor provide additional services such as transportation, meal plans, or extracurricular activities as part of their package?
• Marketing and Outreach Strategies:  Analyze the effectiveness of competitors’  marketing strategies . Evaluate their online presence, community engagement initiatives, or collaborations with local events aimed at engaging parents and attracting prospective clients.
• Facilities and Amenities:  Consider the facilities and amenities offered. A daycare center with secure outdoor play areas, advanced security systems, or partnerships with extracurricular activity providers may stand out from competitors.

What’s Your Daycare’s Unique Value Proposition?

Reflect profoundly on what sets your daycare apart. This could be innovative teaching methodologies, a focus on environmental sustainability, or specialized programs catering to children with diverse needs.

Gather insights from parent feedback, industry trends, and  market research  to identify gaps in the market. For example, if there’s an emerging demand for daycares focused on mindfulness and emotional intelligence, consider integrating such practices into your curriculum.

Tailor your daycare’s services and facilities to match the demographics and preferences of your location. An urban daycare might prioritize flexible schedules and proximity to workplaces, whereas a suburban daycare might emphasize larger outdoor spaces and nature-based learning experiences.

First, conduct a SWOT analysis for the daycare , identifying Strengths (such as a qualified and caring staff, comprehensive educational programs), Weaknesses (like limited space or high operating costs ), Opportunities (for instance, a growing demand for quality early childhood education), and Threats (such as changes in government regulations or competition from new daycares).

Marketing Plan

Next, formulate a marketing strategy that details how to attract and retain families through targeted outreach, referral incentives, a strong online presence, and participation in community events.

Marketing Channels

Employ a mix of marketing channels to reach potential parents and engage effectively with the community.

Digital Marketing

• Social Media Presence:  Leveraging various platforms like Facebook, Instagram, LinkedIn, and Twitter allows you to share engaging content showcasing daily activities, educational insights, testimonials from satisfied parents, and detailed information about your programs and events.
• Website and SEO:  Maintaining an informative, user-friendly website that provides comprehensive details about your daycare’s philosophy, curriculum, staff qualifications, enrollment procedures, and upcoming events. By optimizing your website for local SEO, you enhance visibility in online searches, ensuring that interested parents find your center easily.
• Email Marketing:  Implementing an effective email marketing strategy allows you to regularly communicate with parents, providing updates about enrollment, upcoming events, educational resources, parenting tips, and testimonials. This strategy fosters engagement, builds trust, and maintains a consistent line of communication with parents considering your daycare services.

Local Advertising

• Community Engagement:  Foster connections within the local community by participating in neighborhood events, sponsoring school activities, or organizing open houses and tours to showcase your daycare’s facilities and programs.
• Partnerships:  Collaborate with local businesses, pediatricians, schools, or community centers to establish referral programs, joint events, or educational workshops, thereby increasing your daycare’s visibility and credibility.

Promotional Activities

• Special Enrollment Offers:  Create promotions like ‘Early Bird Registration Discounts,’ ‘Sibling Discount Programs,’ or ‘Refer-a-Friend Incentives’ to attract new enrollments and encourage parent referrals.
• Open House Events:  Host periodic open house events inviting prospective families to tour your facility, meet staff members, and learn about your curriculum and approach to childcare.

Sales Channels

Implement effective sales strategies to convert inquiries into enrollments and ensure customer satisfaction.

Consultative Selling

• Tours and Information Sessions:  Offer guided tours of your daycare center, allowing parents to experience the facilities and interact with teachers. Conduct informative sessions addressing parents’ concerns and questions about your programs, curriculum, safety measures, and daily routines.
• Personalized Approach:  Tailor your communication with parents based on their specific needs and concerns. Highlight how your daycare meets their child’s developmental needs and addresses any apprehensions they might have.

Enrollment Process Efficiency

• Online Enrollment:  Simplify the enrollment process by offering an intuitive, user-friendly online registration system accessible via your website. Ensure it provides all necessary information and offers secure payment options for a seamless experience.
• Enrollment Incentives:  Provide incentives like waived registration fees, trial days, or discounts on the first month’s tuition to encourage parents to enroll their children at your daycare.

Retention Strategies

• Parent Engagement:  Foster a sense of community by organizing family-friendly events, parent-teacher conferences, workshops on child development, and educational seminars. Encourage parental involvement through volunteering opportunities or participation in daycare activities.
• Quality Service Delivery:  Focus on delivering exceptional childcare services, ensuring the safety and well-being of children, providing engaging learning activities, maintaining open communication with parents, and offering regular progress updates about their child’s development.

Strategy Timeline

Lastly, draft a precise timeline that marks crucial milestones for the daycare’s launch, marketing initiatives, enrollment targets, and growth plans, ensuring the business progresses with clear goals and intent.

The Management section focuses on the daycare business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the daycare business toward its financial and operational goals.

For your daycare business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your daycare business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your daycare business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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Privacy Overview

Daycare Business Plan Template

If you want to start your own daycare business or expand your current daycare center, you need a business plan.

The following daycare business plan template gives you the key elements to include in a winning childcare business plan. In addition to this template, conducting research will not only support your business concept, but help you better understand the daycare industry, pricing strategies and your target market. It will also help you craft a smart marketing plan and strong financial projections.

You can download our Daycare business plan template (including a full, customizable financial model) to your computer here.

Daycare Business Plan Example

I. executive summary, business overview.

[Company Name], located at [insert location here] is a new, upscale daycare focusing on offering a safe, play-based, nurturing environment to promote the physical, social, emotional, cognitive and creative development of children and infants through five years of age. The goal is not simply to look after our client’s children while they attempt to prioritize their various other time commitments, but to truly facilitate the advancement of young minds and bodies during critical years of development.

[Company name] will be staffed with qualified supervisors and attendants who will act as facilitators and teachers. The education curriculum will be based upon the principle that preschoolers learn and develop best through carefully supervised play with educational materials. The Childcare Center environment will provide stimulating, challenging materials, experiences and equipment for children. Each child will have the opportunity to grow emotionally, socially, intellectually, creatively, and physically.

Customer Focus

[Company Name] will primarily serve the residents within a 5-mile radius of our location. The demographics of these customers are as follows:

• 28,672 residents
• Average income of $98,119
• 57.8% married
• 62% in Management/Professional occupations
• Median age: 42.9 years

Management Team

[Company Name] is led by [Founder’s Name] who has been in the daycare business for 20 years. While [Founder] has never run a daycare facility himself, he has taught kindergarten classes in a local elementary school for 20 years and before that worked in the daycare industry for almost 10 years. As such, [Founder] has in-depth knowledge of the daycare business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• There are currently no upscale daycare centers in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback indicating that customers would be highly receptive to our services once operations are launched.
• Our location is in an area with many high-income families that include a significant number of business professionals (62% of the population). This means that the customer demographics indicate that individuals have the financial means and the prerequisite demand for our company to thrive in [company location].
• The management team has a track record of success in the daycare business.
• Parents are becoming increasingly concerned regarding the development of their preschool age children. Studies indicate that from conception to age three or four is when the brain matures and personality develops, and when psychological and social patterns of bonding with primary caregivers and the community at large are established. For this reason, many high-income parents are willing to pay a premium for truly quality services that will foster a comfortable and nurturing environment for their children to develop.

Financial Highlights

[Company Name] is currently seeking $325,000 to launch. Specifically, these funds will be used as follows:

• Center design/build: $175,000
• Working capital: $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

II. Company Overview

Who is [company name].

[Company Name], located at [insert location here] is a new, upscale daycare that seeks to attract customers that value their children’s growth and hopes to be viewed as a facility that facilitates the lifelong journey of discovery – one that is informative, enlivened, and enriched by academic achievement, entertainment and personal growth. The aim of [Company Name] is to provide a nurturing environment where every child learns better and is surrounded by affectionate and caring people.

The center is a licensed day care facility and will operate on week days from 7:00am to 6:15pm. The center has a capacity of 80 children and is staffed with qualified, skilled supervisors and attendants who will look after the children in a motherly way trying to teach healthy eating habits, team spirit, a caring attitude and hobby development in every child who comes to the center. The staff will be responsible for the daily care and teachings of the children, meals, first aid and cleanliness. [Company Name]’s quality educational programs consist of:

• Lessons in drawing, painting and dance as a part of day-to-day activities
• Nutritious meal plan for lunch and snacks
• Curriculum that is gender inclusive, recognizing the society as multicultural and supportive of social justice
• Environment similar to that of school campus
• Staff that fosters competence, dignity, a sense of independence and pride in oneself

[Company Name]’s History

After 20 years teaching children at an elementary school level, [Founder’s Name] realized what a significant impact he was having upon bright young minds and the limitations that the school environment had upon his teaching curriculum. After surveying the local customer base, finding a potential location, and incorporating [Company Name] as an S-Corporation on [date of incorporation], [Founder’s Name] was able to successfully launch his daycare services from his home with only himself as an employee. Once [Name of Founder] recognized that his services were in high demand and his operations became confined by his location (his home), he decided to expand his operations.

The business is currently being run out of [Founder’s Name] home, but once the lease on [Company Name]’s commercial location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

• Found commercial real estate space and signed Letter of Intent to lease it
• Developed the company’s name, logo and website located at www…
• Determined equipment and supply requirements
• Began recruiting key employees with experience in the child care

[Company Name]’s Services

Below are [Company Name]’s daily service offerings that will engage its attendees on a daily basis. All items are classified under the following main categories:

• Nutritious meal plan to take care of lunch and snack requirements
• Environment similar to that of school campus and teaches encouragement of peers

In addition to these general principles, the Company will attempt to create concrete classes for its “students” in order to formalize its experience and efficiently advance their development as life long learners. Furthermore, this classroom learning environment, coupled with elements of play, will allow attendees to bond with their classmates and allow staff members to provide personal attention to each member. The following is an example for class design based on projected enrollment of children in four age groups.

Group Size 0-27 months (4 children) (1 class) 1 senior staff member 3 year old (24 children) (3 classes) 3 senior staff members 4 year old (20 children) (2 classes) 2 senior staff members 5 year old (30 children) (3 classes) 2 senior staff members

Overall strength in the enrollment of students will grow from year to year based on the demand for this service in the area. [Company Name] expects to be at full capacity from the onset and beyond. The Company’s facilities will operate on weekdays from 7:00am to 6:15pm. The business will generate revenue through its enrollment of children.

Facility Design

[Company Name] will develop a 1,820 square foot daycare center whose key elements will include the following:

• Classroom Areas
• Infant Room
• Administration Office
• Recreational Area

Below you will find a rough sketch of the floor plan:

III. Industry Analysis

Today, childcare centers have become a common and necessary part of millions of Americans’ lives. More women in the workforce, longer workweeks and educational research supporting the importance of early childhood education have contributed to the rise of early childhood centers throughout the United States. Since working parents are unable to pay attention to the proper academic and mental growth of their children during the days, they opt for the services of daycare centers. Working parents face numerous decisions when balancing their work and home life, including choosing the type of care to provide for their children while they work.

Industry Statistics & Trends

The following industry size facts and statistics bode well for [Company Name]:

According to the United States Department of Labor, “Obtaining affordable, quality child day care, especially for children under age 5, is a major concern for many parents, particularly in recent years with the rise in families with two working parents. As the need for child day care has increased in the last decade, the child day care services industry began to fill the need of non-relative child care.”

Often employment statistics are a good indicator of where an industry will likely move in the near future; after all, demands for human resources generally reflect a strong demand for products or services within an industry. The United States Department of Labor further indicates that, “wage and salary jobs in the child day care services industry are projected to grow about 34 percent over the 2006-16 period, compared with the 11 percent employment growth projected for all industries combined. The rising demand for child day care services driving industry growth reflects in part demographic trends. Over the same period, the number of children under age 5 is expected to increase at a faster rate than in previous years and many of them will continue to be raised in households with two working parents or a single working parent. Furthermore, growing numbers of parents will hold jobs that require work during weekends, evenings, and late nights. As a result, demand will grow significantly for child care programs that can provide care during not only traditional weekday hours, but nontraditional hours as well. In addition, school-aged children, who generally require child care only before and after school, increasingly are being cared for in centers.”

Interest in the use of professional childcare has grown as the proportion of women in the labor force increased. The growing number of working couples has lead to an increase in demand for child care centers. The stay-at-home trend is decreasing, making child daycare centers important.

Click below to see each section of our free child care business plan template. You can also click here to get our sample daycare business plan pdf .

IV. Customer Analysis

Demographic profile of target market.

[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].

The area we serve is affluent and many are employed in professional services, which means many residents must find competent and reliable day care services for their toddlers and children (especially during regular work hours).

The precise demographics of the town in which our location resides is as follows:

Customer Segmentation

We will primarily target the following three customer segments:

• Stay-at-home moms: Although it may seem counter-intuitive to market [Company Name]’s services to this particular segment, marketing services to this group may have some distinct advantages. First, although traditional day care centers do not offer a comprehensive set of services, [Company Name] will offer its customers a thoroughly nurturing environment that combines the concepts of play with actual learning (articulated in its extensive class offerings). Furthermore, our services allow children to interact with one another through play, an experience not easily fulfilled by stay-at-home mothers. Lastly, these individuals often have many children and thus many responsibilities – it may be easier for them to handle all of their responsibilities if they utilize our services a few times a week.
• Business Professionals: The [company location] area is filled with affluent individuals that work in professional environments (this means long work hours as well). These individuals include those who are currently using, but are unsatisfied with, competitors of [Company Name]. For this reason, these individuals need the services that [Company Name] can provide.
• Single Parents: Single parents of ten work long hours and do not have a spouse to take care of their children. This segment of individuals is looking primarily for reliability (a daycare that is both dependable and flexible around their hectic schedule).

V. Competitive Analysis

Direct & indirect competitors.

Childcare is one of the fastest growing business sectors in the US. In the age of stiff competition, a sustainable competitive advantage is crucial for the success of players in the daycare industry. While the need for day care services continues to grow as does the number of people interested in providing this service, daycare centers are becoming an extension of personal parental care. These centers differ in relation to the types and the quality of services offered. With the demand expected to increase in the future, this industry is poised to grow.

Competition in general can be divided into two categories and these key local competitors within a 5-mile radius:

Day care centers

Daycare centers begin care for babies six to eight weeks old and serve children until they begin kindergarten. Some of our specific competitors include:

• YMCA: The YMCA runs after-school as well as all-day day care services to the general public and has toys as well as jungle-gym facilities for its attendees. Though their services are well-known, and their public image recognized, the YMCA requires each of its members to be toilet trained, have a comprehensive immunization record, and some services are limited to customers that income quality. Furthermore, their services are more or less limited to daycare services which teach their students very little (mostly just looking after kids as they play).
• Jane Street Day Care: Jane Street has been open for 10 years and operates at its capacity of 100 children at a time. Internet reviews and reports from speaking with prior customers of Jane Street show that this daycare has high turnover of children and parents who find the staff and service they receive at Jane Street very uneven. Jane Street has the advantage of a central location but suffers from its poor brand image.

Preschool refers to early childhood programs for children from age two and half to five or six.

• Plainview Montessori: Plainview offers a structured learning approach and experienced staff, but operates only part-day classes. Plainview also operates at its capacity and has little means to expand in its current location. If Plainview chooses to change locations to expand it will take years to complete this transition. In the meantime, [Company Name] will begin to serve the additional children in the area.

Competitive Pricing

Competitive advantage.

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Location: [Company Name]’s location is near the center of town. Our location is geographically close to a high density of professional business establishments which puts us in close proximity to our target customers.
• Management: Our management team has years of business and marketing experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers and other influencers. As such, it will be relatively easy for us to build awareness with the community as well as a loyal customer base.
• High-Quality Staff: The thing that truly separates [Company Name] from its competitors is the quality of our staff and their attention to each individual learner. Through our high-quality staff, we will provide classes that integrate fun and learning into a comprehensive package guided by the principles of efficient childhood development.

VI. Marketing Plan

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] brand will focus on the Company’s unique value proposition:

• Offering a comprehensive learning environment that not only teaches children the value of play, but using those principles to further their emotional, intellectual, and physical development.
• Offering a convenient location that is close to its customer base.
• Providing excellent customer service.

Promotions Strategy

[Company Name] expects its target market to be parents working and/or living within a 5-mile radius of each of its store. The Company’s promotions strategy to reach these individuals includes:

Direct Mail

[Company Name] will distribute direct mail fliers to neighborhoods surrounding its location. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to frequent the store.

Public Relations

We will contact all local and area newspapers and television stations to tell them about the opening and unique value proposition of [Company Name].

Advertising

[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events , products and more.

Pricing Strategy

[Company Name]’s will segregate children into different age groups ranging from six weeks to five years. The Company will charge a flat rate of $200 per child per week to all children for full-time care regardless of his/her age. This fee can be considered very competitive with high-quality care, such as the local Montessori. The Company also aims at giving discount of 15% to employees of businesses with which the center has partnerships.

VII. Operations Plan

Functional roles.

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

• General & administrative functions including legal, marketing, bookkeeping, etc.
• Hiring and training staff

Kitchen Functions

• Food preparation for all day learners

Store/Retail Functions

• Teachers for each class
• Customer Service Representatives
• Janitor/maintenance personnel to keep the store clean

To execute upon these day-to-day obligations, the company has created a cost-effective business model that will streamline processes and create an efficient chain of command.

[Company Name] expects to achieve the following milestones in the following [] months:

VIII. Management Team

Management team members.

[Company Name] is led by [Founder’s Name] who has been in the daycare business for 20 years.

While [Founder] has never run a daycare center himself, he has taught elementary school classes at a local elementary school for 20 years. [Founder] also has considerable experience working in the daycare industry as he has worked for ten years at an existing daycare facility. There, he learned how to interact with young children and was able to splice the principles of learning (which he clearly employed during his work at XYZ elementary school) with the elements of productive play (which he picked up during his years at ABC daycare center. In addition, [Founder] also holds a 90-hour certificate in Early Childhood Education from Prince George’s Community College.

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Company Name] will maintain the student-teacher ratio required by government regulation. Each employee will be familiar with first aid and CPR and have medical clearance and fingerprints on file. The following are the staff requirement and background are described below:

• Must be at least 21 years old
• Director can only cover 50% of the time
• The director must have 90 hour certification
• Must have 90 hour certification
• One year experience
• At least 19 years of age
• Completed high school
• Must have 45 hour certification (group leader class)

IX. Financial Plan

Revenue and cost drivers.

[Company Name]’s revenues will come from its daycare services.

The major costs for the company will be staffing, location maintenance, and food preparation. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $325,000 to launch its business. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Store design/build: $175,000

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement

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