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How to Write a Business Plan for a Daycare: Complete Guide

• January 30, 2023

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Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your daycare, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your daycare business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it’s the summary of the different sections included in your business plan.

Why do you need a business plan for your daycare?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or private grant

How to write an executive summary for your daycare?

The executive summary of your daycare business plan should include the following important information:

Business Overview

Introduce your company (its name, its mission) and the history behind it: why did you decide to create a daycare in your area today? Why you? 

Also, that’s where you should expand on the business: where will the daycare facility be located? How old are the children you target? How many children will you be able to take care of? What are the amenities (classrooms, playground, cafeteria, etc.)? 

Market Overview

Provide here a deep market analysis that backs your decision to open a daycare business in your area today. Why would your business succeed given current market conditions? 

For example, the market analysis should include information like: what are your competitors in the area? What are their characteristics, strengths and weaknesses ? Who are your target audience (parents and children)? Is that in line with the demographics in your area?

Management & People

Who is the management team? What is your/their experience in the daycare industry?

Financial plan

What is your expected revenue and profitability for the next 5 years? When do you expect to break-even? Simply include here a chart of your key financials (e.g. Revenue, Gross Profit, Net profit )

Funding Ask

What loan/investment/grant are you seeking? How much do you need? How do you intend to spend the money?

Daycare Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Daycare Business Overview

The business overview section of the daycare business plan summarizes the basics of your facility, including the background information, business model, services, target audience, and legal structure. 

a) History of the Project

When you launch a daycare business, you want it to grow and even become the best in the region if possible. One small element that can catalyze your company’s growth is its history. You don’t have to exaggerate the information here, but try to include useful details that will make your daycare business stand out. 

For a business as sensitive as daycare, trust overrides anything else. So, make sure to include in your business plan your experience and passion for children to demonstrate to investors you are qualified and the right person to successfully run a new daycare facility.

Also, flesh out the history behind the project: why are you starting a daycare now? For example, you may have noticed a lack of child care services for toddlers and infants in the city.

b) Business Model

Next up is the business model. This is the revenue-generating plan that identifies how your business operates. A daycare business model should be succinct and address specific things about the business. 

For instance, is it a commercial daycare facility or a family daycare? Is it an independent facility or a partnership? And should you opt for a daycare franchise? 

Keep in mind that daycare facilities vary by the target age group. So, you can opt for a childcare center, a family daycare, a kindergarten/pre-school, or a nursery school.

c) Daycare Services

It takes a lot to raise a child. So, be clear on the services you want to offer in your newly founded daycare facility. The quality of services will make your business more attractive. But an even bigger factor will be the type of services you provide at the facility.

Indeed, a lot happens inside a daycare facility, from hands-on learning (classrooms, private tuition) to field trips, games and community events. 

d) Pricing Strategy

Age is a key factor when setting the prices of your daycare services. On average, parents across the US pay about $9,400 per year on child care per child. Of course, the actual figure will vary based on a number of factors, but this is a great starting point when getting into the industry. 

An accurate pricing strategy can help you outshine your biggest competitors. However, don’t forget that setting cheaper prices isn’t necessarily the best strategy, just in the same way overpriced services may turn off potential clients. 

e) Target Audience

Daycare centers are so named because they are about a child’s well-being. However, the final decision rests with the parents, who must buy into your idea and long-term vision for the facility. 

For this type of business, you have a definite target market . And all you have to do is ensure your facility is closer to a busy neighborhood with many children. Find out if the families truly need child care services, why they need these services and the children’s average age. 

Finally, make sure your services are aligned with your target audience. For example, you wouldn’t necessarily succeed with a daycare operating 9am – 4pm in an area where parents typically work long hours in the city and need time to commute back to their neighborhood to pick up their kids.

Same goes for pricing: if you offer high-quality expensive daycare services, make sure your daycare is either located close to offices or in an area where affluent parents work or live.

f) Legal Structure

Finally, your business overview section should specify what type of business structure you opt for. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Daycare Market Overview

In the market overview section of your business plan, you must cover 2 important areas:

• Market trends : how big is the daycare industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
• Competition analysis : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?

a) Daycare Market Trends

How big is the daycare industry in the us.

It’s always helpful to base your business decisions on the latest trends in the US market. For instance, the US daycare market had a value of approximately $54.3 billion in 2019 . And it is projected to grow at an annual rate of 3.9% from 2020 through 2027. 

According to reports, the high number of parents occupying full-time and part-time jobs is a major driving force behind the increasing demand for daycare services. No matter how you look at it, these statistics make the daycare business even more lucrative, provided you get all the basics right through your business plan. 

How big is the daycare industry in your region?

After the US, assess the size of the daycare market in your city or area. Focus on the zone where you plan to offer daycare services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup . To give you an example, let’s assume you plan to operate in an area where there are already 10 competitors:

As we know the US daycare industry is worth $54 billion today, and there are about 230,000 child care centers , therefore the average annual turnover per child care center is around $235,000.

Now, we can safely assume that the daycare industry is worth $23 million in your area (10 centers).

How fast is the daycare industry growing in your region?

Growth is an important metric for assessing the status of the daycare industry in your region. 

Here if you don’t find information online or via your research, you can calculate growth using the total number of competitors in your area. 

For example, assuming there were 8 daycare competitors in the region in 2018, and 10 in 2022, the annual growth rate is 6% per year.

b) Daycare Competitor Analysis

At the very least, your competitor analysis should answer all the questions below:

• How many daycare businesses are the area where you plan to open yours?
• What type of daycare businesses are there: home-based vs. center-based home care, early care vs. early education & daycare, etc.
• What age range do they specialise in?
• What services do your competitors offer?
• What amenities do your competitors have (playground, classrooms, etc.)
• What’s their average price (daily rate / monthly rate)?
• What is the child / staff ratio of your competitors?

4. Sales & Marketing Strategy

For some existing daycare facilities, marketing isn’t the most important aspect of running the business. But you’ll probably have to implement a few marketing strategies at the beginning to attract the first families , especially if you’re starting a new daycare facility.

a) Daycare Market Channels

A daycare business doesn’t have diverse marketing channels like retail stores or other businesses. So, this may limit your options when it comes to new marketing channels. 

Apart from word of mouth, other marketing channels include;

• Social media
• Online listing (Google business, Facebook business page)
• Word-of-mouth

b) What are Your Unique Selling Points (USPs)? 

Daycare facilities offer pretty much the same services, and it’s not easy to stand out from the competition. However, a few factors can be useful when evaluating your opportunities in a competitive market, including:

• Target age group : You may cover a unique age group as opposed to your competitors
• Opening hours : you may offer longer opening hours to accommodate for different parents’ jobs and availabilities
• Price : Your services may be cheaper than your competitors
• Quality & amenities : Quality services and extra amenities (outdoor playground, etc.) will make your daycare facility more attractive vs. competitors
• Services : Your services may go beyond the standard hands-on learning and kid games 

5. Management & People

The 5th section of your daycare business plan should be about people. It should include 2 main elements:

• The management team and their experience / track record
• The organizational structure: what are the different teams and who reports to whom?

a) Management

Here you should list all the management roles in your company.

Of course, the amount of details you need to include here varies depending on the size of your company. For example, a small daycare business run by 1 or 2 persons doesn’t need the same level of detail vs. a large center with 50 children or more.

If you plan on running your business independently, you may write a short paragraph explaining who are the co-founders and/or senior managers (if there are any in addition to yourself). It’s important to highlight their experience in the industry and previous relevant professional experiences.

b) Organizational structure

No matter how many leadership roles there are, you should now explain how you intend to run the company from a management standpoint.

What are the different teams (management, childcare staff, cooking staff, human resources, finance, etc.)?

Note that you should include these details even if you haven’t hired anyone yet. It will show lenders and investors that you have a solid hiring and management plan to run the business successfully.

A great addition here is to add an organizational chart that list all the roles, from Directors to managers, key supervisory roles and employees. Make sure to highlight with reporting lines who manages/supervises whom.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your daycare is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to start a new daycare facility, or add capacity to an existing daycare center, renovate your facilities, etc.)
• The 5-year financial projections

a) Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project.

For a daycare, startup costs are all the expenses you incur before you open the space to your customers. These expenses typically include: renovation costs, equipment and furniture, etc.

The startup costs for opening a child care center depend on various factors such as the location and size of your daycare facilities, the capacity (the number of children you plan to have), the quality of the amenities, etc. 

We’ve identified that it costs anywhere between $130,000 to $490,000 to start a daycare business with 50 children . See below the cost estimates.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you. Let’s first start below with startup costs. 

c) Financial Projections

In addition to startup costs, you will now need to build a solid daycare financial model over 5 years.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of children over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of members as a small change in these assumptions will have a big impact on your revenues.

When it comes to the costs, consider both startup and operating costs. For more information, read our complete guide here .

7. Funding Ask

This is the last section of the business plan of your daycare center. Now that we have explained what type of daycare services your company would offer, at what price, your marketing strategy , management and people, this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations? Or will it cover the cost of the salaries of your childcare staff and other employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our daycare financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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How to Write a Business Plan for Daycare and Preschool

• brightwheel
• Running a business

Writing a daycare or preschool business plan is a big task, but due diligence and hard work will help you understand what you’ll need to launch and run a daycare or preschool successfully.

What do daycare investors want?

Your local government will have rules and regulations you’ll need to follow as a small business owner and childcare provider. Start by reviewing the childcare licensing guidelines for your state and city. Once you’re clear on licensing guidelines, you’re ready to start writing your childcare business plan.

The purpose of a business plan is to help secure funding. You’ll likely need financing to launch your preschool or daycare, especially if you want to avoid the monthly repayment of a loan. 

Investors provide businesses with money in exchange for partial ownership. As a result, they expect a larger return on their initial investment. Because many investors work in business, they prefer to invest in an established company.

Most investors look for:

Industry background and experience

Financial performance and promise.

Investors want to make money. Therefore, they are more inclined to work with experienced entrepreneurs and business owners to guarantee a return on their investment. 

This might sound discouraging for those with little experience or without a business management background, but the opportunity doesn’t end there. You could consider bringing on a partner with a business background. Additionally, many investors act as a source of business advice. 

You need to demonstrate that your business will make money. Investors will likely want to see signs of business growth before they give you money. 

Additionally, investors will want to know about your financial stability. Questions an investor might ask are:

• What do you plan to do with the money?
• Has your business been up or down in recent years?
• Is your company losing money? Are there signs of growth for the future?
• How do you plan to repay your investment?

Of course, every investor is different, so they’ll consider various factors. While experience and financial promise are at the top of the list for most investors, they might also look for uniqueness, business readiness, an effective business model, and more.

Writing a daycare business plan

We’ve discussed licensing and investors. Now, you’re ready to begin the framework of your business plan for daycares and preschools. Here’s what you’ll need to get started:

Business description

Needs assessment, insurance policies, operating policies and procedures, marketing strategy.

Start with the basics: what does your daycare do? Detailing the service you’re offering will help you create a clear business plan. Next, you might want to write some goals or even a mission statement outlining your purpose and motivation.

Start by looking at general daycare or preschool industry trends, then narrow your scope to the preschools or daycares in your local area. Next, you’ll need to figure out who your target customers are and confirm that there is a need for a business like yours in your community. 

Are there a lot of young families in your neighborhood? Are you located somewhere convenient for commuting parents? Does your business offer a specific service that your competitors don’t, like early check-in or extended hours? 

Also, check out the competition. Research the existing daycare or preschool options in your community. Look at current preschool or daycare business plan samples. What makes your daycare or preschool unique? 

Developing detailed budgets will help you run your small business. You’ll need to compare your current cash flow and expenditures to determine whether you’ll make a profit.

Build a budget for unexpected costs. For example, how many children do you need to serve to be able to pay your bills and stay afloat? Child Care Aware of America offers some terrific budgeting resources for this process.

Depending on the type and size of your preschool, you’ll need insurance policies of several different types, including liability, property, workers’ compensation, and business insurance. Check the licensing requirements for guidance in building this part of your preschool business plan.

Create a comprehensive handbook for families and staff that includes you center's policies and procedures. For instance, you'll need to develop an emergency plan , daycare sick policy , and other safety protocols according to your local childcare licensing requirements. 

Your staff handbook will be a helpful resource your employees can reference and include all your employment policies including work and pay schedules, benefits, and information about professional growth and development. You can also include information on your center's philosophy and curriculum, classroom procedures, and expectations for working with children and families.

Your marketing strategy is the key to attracting customers. Decide what type of advertising you will use in front of potential customers. For example, list your school in local directories and participate in parenting and kid-friendly community events. Run a social media campaign focusing on your target population.

Another big part of childcare business marketing is differentiating yourself from other preschools. These days adopting daycare software is a surefire way to attract families with young children. A tool like brightwheel's center management feature will streamline your center's admission process, record keeping, and reporting, saving you up to 20 hours per month. 

You can also use brightwheel for recording and tracking daily events and activities, and sending real-time updates to families throughout the day. It also offers secure, digital check-in/check-out and a paperless billing system. This is a great way to keep your families looped in on daily activities and handle all of your administrative tasks in one place.

Your business is ready!

Writing a business plan can be stressful, but it doesn’t have to be. Once you secure the proper licensing, use the information in this article to guide you through creating a solid daycare business plan that drives investors and financing to your business.

These are just the basics to get you started. For further information, the U.S. Small Business Administration’s website has detailed instructions on creating each necessary part of a successful business plan. 

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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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Daycare Business Plan

What is a Daycare Business Plan?

A daycare business plan is an equivalent of a roadmap in your business journey. A plan helps you understand what you’re getting yourself into.

It helps you understand the market, figure out where you stand in it, know your target audience better, and formulate better marketing and financial strategies.

Overall, it makes your decision-making process faster and more effective and prevents you from feeling clueless at any point in your business journey.

Moreover, it also helps you get investors and helps your employees and partners understand what your business stands for. It gives the people in your business a feeling that you have a vision and know what you are doing with your business.

Also, you get to set clear goals that give you a direction to work and put your efforts in.

Why is a Daycare Business Plan Important?

Everything you do for your business should add value to it. And here’s how a daycare business plan can add value to your business:

It gives you a sense of direction

There are several ways you can go with each business decision. A business plan helps you understand what would work best for your business then.

Also, it gives a set of tangible goals to look forward to when you work on your business.

It helps you understand your target audience better

Planning your business gives a better form and structure to your research. Which at the end of the day helps you understand your customers better. It also helps you analyze what it means for your business.

Making and upgrading your product or service for your customers serves the biggest purpose at the end of the day.

It helps you understand your competition better

Imagine there’s a popular daycare center in your city and several parents swear by it. Now, this could mean several things for your business.

You’ll have to pick a different location, know the daycare service’s weaknesses and offer better services by working on that area for your business.

You can also pick the things they are doing right, and inculcate the same in your strategies.

A business plan can help you do all of the above and more through a competitive analysis.

It helps you convince your investors

Though making the right prediction is difficult, having a rough idea of your business’s sales and financial potential is important to get investors on board.

Investors want to know the scalability of your business before they invest in it. A good and realistic prediction of returns makes it easier to convince investors.

And a business plan can help you make realistic financial predictions.

It keeps you updated with the latest business trends

A business plan is a living document that grows alongside your business. It also helps you have a foresight of changing trends and act on time for getting the best results for your business.

This also makes it important for you to keep updating your plan as your business grows.

What does a Daycare Business Plan Look Like?

If you are planning to start a new auto or car repair shop, the first thing you will need is a business plan. Use our sample Daycare Business Plan created using Upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new auto repairing shop, spend as much time as you can reading through some examples of Children’s & Pet business plans .

Moreover, business plans come in different forms to fit the current state of your business.

Apart from that, there are a few major sections that should be included in every business plan.

Daycare Business Plan Outline

This is the standard business plan outline which will cover all important sections that you should include in your business plan.

• Executive Summary
• Keys to Success
• Company Summary
• Timothy Bernard Kilpatrick
• Start-up Summary
• Locations and Facilities
• Service Description
• Competitive Comparison
• Sales Literature
• Fulfillment
• Future Services
• Industry Analysis
• Market Segmentation
• Market Analysis
• Market Needs
• Market Trends
• Market Growth
• Business Participants
• Competition and Buying Patterns
• Main Competitors
• Strategy and Implementation Summary
• Value Proposition
• Competitive Edge
• Positioning Statement
• Pricing Strategy
• Promotion Strategy
• Marketing Programs
• Sales Forecast
• Sales Programs
• Strategic Alliances
• Web Plan Summary
• Website Marketing Strategy
• Development Requirements
• Management Summary
• Organizational Structure
• Timothy B. Kilpatrick
• Carolyn Steverson
• Candice Harris
• Management Team Gaps
• Personnel Plan
• Projected Profit and Loss
• Projected Cash Flow
• Projected Balance Sheet

What to Include in Your Daycare Business Plan?

A good daycare business plan consists of a certain number of well-defined sections, the following sections can help you in writing an excellent business plan.

1. Executive Summary

The executive summary section is one of the most important sections of your business plan because it not only forms the first section of your business plan but also acts as a pitch for potential investors who can provide you with funds for your daycare business.

It consists of your company’s vision and mission, its USP, objectives, and also expected revenues.

Writing the executive summary section of your plan at the very end, so you can sum up your plan properly is a good tip to remember.

2. Services

In this section, you should give out a clear idea of what your services are and whom it caters to. You should define your target market, your niche, the area your services will be extended to, etc.

As a daycare center, you should have a clear idea of the age group you will cater to, what is the preferred location of your target audience, how you come off as a service to your customers, and so on.

3. Market Analysis

Market analysis can be of great help to any business, it can help you understand what you are getting yourself into, who your competitors are, what your client base expects out of you, and where you stand in the current market situation.

Hence, market analysis immensely improves your understanding of the industry you are getting into. In the case of a daycare center knowing the best practices of childcare that exist in the market can be of great help.

4. Web Plan

In today’s internet-based world, most busy parents looking for a daycare center online. Hence, having a strong and reliable web presence is crucial to the success of your daycare business. Thus, including a web strategy in your business plan is necessary.

Always remember, as a daycare service coming off as a trustworthy and reliable institution is crucial for your business to work.

5. Management and Organizational Structure

Having a well-structured management system is especially crucial for a daycare service. It not only helps your business run smoother, but it also makes you look more responsible and reliable in front of the parents or the primary caregivers.

In this section, you should include the structure of your organization, details about people on various levels in your company, a solid system for tracking everyone’s work and progress, the areas your team is excelling at, and the areas your team is lagging in.

6. Financial Plan

One of the chief reasons for several daycare services running out of business is poorly managed finances or running out of funds to keep going.

Planning your finances in the early stages of your business saves you from encountering such a problem later on.

Hence, planning your finances is mandatory while writing a business plan.

Download a sample daycare business plan

Need help writing your business plan from scratch? Here you go;  download our free daycare business plan pdf  to start.

It’s a modern business plan template specifically designed for your daycare business. Use the example business plan as a guide for writing your own.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Daycare Business Plan Summary

In conclusion, apart from having a good image as an organization, a well-managed team, a clearly defined niche, thorough research of the market and an excellent financial plan is crucial to the success of a daycare business.

After getting started with Upmetrics , you can copy this sample daycare business plan into your business plan and modify the required information and download your daycare business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

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Legal Templates

Home Business Business Plan Daycare

Daycare Business Plan Template

Download our template and create a business plan for your daycare!

Updated September 22, 2023 Reviewed by Brooke Davis

When you are ready to start a daycare business, you need an effective plan outlining how to get there. High-quality child care is in high demand, but you must be prepared for the challenges of starting a new business.

A solid business plan will get you off on the right foot before you even open the doors of your new facility.

With these helpful tips, you can learn how to make a business plan for a daycare center. Whether you are looking to watch over young children or even need a dog daycare business plan, Legal Templates is here to help you get started.

Why You Need a Business Plan for Your Daycare Business

How to write a business plan for a daycare.

• Management Team

Daycare Business Plan Sample

A business plan sets the stage for how you will operate your business and how you will get it running. A daycare is no different. Opening a daycare requires intensive planning, legal compliance, and understanding of your market.

A daycare business plan template walks you through the steps to build a proper path forward. Every successful business is planned correctly, not as you go along.

A sample daycare business plan pdf or Word document lays it out for you. You can learn how to put it together and what you must include. Many business plans help you understand what you must do to prepare.

Some are designed to recruit potential investors to your cause. Either way, you need a business plan to prepare you for the challenges and successes ahead.

Knowing how to write your daycare business plan can be tricky without some help. You may not have done this before, but a daycare business plan example can help.

Follow these writing tips in each section to create a strong business plan for your future daycare.

1. Executive Summary

The initial section of your business plan is the executive summary. This part of your plan is an introduction for whoever reads it. It is designed to offer an overview of the remaining sections. It should be concise and add only summary details—this is not the section for intensive information or data.

The executive summary will highlight what your daycare business will look like and the most crucial section of your entire plan.

This section may provide information such as:

• A business address
• Phone number, email address, and other contact information
• List of owners
• Banking information
• Start date for the daycare
• Client base
• Market niche
• Factors for success

The executive summary lets you make a case for why your particular daycare will be successful and competitive. It is also the section that helps you sell yourself and your business to potential investors who may play a critical role in starting your daycare.

Provide a mission statement that reflects your goals for the daycare and your motivation for starting your business.

2. Management Team

Your daycare business plan should include important information about your management team. The first part of this section may address ownership of the business itself. It should outline all essential ownership details, such as:

• Legal names of every owner
• Each owner’s proportionate share
• The format of ownership percentage (i.e., stocks, capital investments, etc.)
• The format of the business (Corporation, LLC, etc.)
• Contact information for each owner

You want everyone who reads this business plan to know who has a stake and how their interests are represented. These details are a crucial part of business formation and preventing costly legal disputes in the future.

The management team section should also include the profiles of your management staff. These people will run the business daily, and they should be properly vetted before being put in charge.

Your business plan should list the management teams’:

• Names and positions
• Summary of responsibilities
• Credentials and education background
• Prior employment or experience
• Early childhood education licensing or other credentialing
• Management experience
• Salary and benefits
• Past success in a similar role

This information should demonstrate why these are the right people for the job. Not only does it help you know how your business will run, but it also shows others you have a proper plan in place for your daycare.

3. Products and Services

This section lets you talk about why you are starting this business in the first place. You will outline the services or products you intend to sell to consumers. For a daycare, it should outline the following:

• Who is being cared for: Children, elderly adults, or pets?
• Business hours
• Staff costs and required credentials
• Will you offer food, diapers, and other child-care products?
• How will you measure sales metrics

Daycare is typically considered a service, but product sales are also often a part of this model. Your plan should adequately account for how you will handle this dual purpose and how it fits into your business model.

4. Customers and Marketing

You must identify your market and how you will get customers into your daycare. This section will focus on your area’s need for daycare services and the types of customers you expect to get.

Identification of customers is a vital part of a business plan and should include details like:

• How many parents need childcare services?
• What costs can families be expected to pay for your services
• The community you will target
• Demographic data for potential customers

With your customers in mind, you can focus on your marketing strategies. You want to differentiate yourself from competitors and ensure the community knows your new business. The daycare business plan must outline how you will achieve these goals.

A marketing strategy should combine both traditional and digital marketing methods, including:

• Open houses
• Word-of-mouth advertising
• Advertisements in the paper or yellow pages
• Billboards or other ads
• Television, radio, or internet advertisements
• Social media pages

5. SWOT Analysis

A SWOT analysis will address your daycare’s strengths, weaknesses, opportunities, and potential threats. This analytical method examines your company and how it will operate.

It puts each of the four metrics into a visual matrix to help prospective business owners quickly identify favorable and unfavorable factors that may affect their business venture.

A SWOT analysis should focus on how your daycare services can perform against competitors. It may address factors like:

• Any threats the daycare may face
• Competitive advantages and why they would be successful
• Areas that may be improved over time
• Technology or resources the company may use to increase efficiency
• Internal factors that may affect economic success

Detailed SWOT sections show investors you have done your homework and give you valuable data to make informed business choices.

6. Financials

A business plan should address the unique financial situation you face. Your daycare business plan should demonstrate your break-even amounts and expected profit margins.

It will also address the costs and the areas of revenue you expect. You will want to address the following:

• Enrollment fees
• Payment plans
• Cost of supplies and materials
• Employee costs
• Regulatory costs
• Additional program offerings and revenue
• Necessary loans or capital improvements

A well-developed budget can demonstrate expected cash flows versus expected expenditures. Knowing how to handle these costs will be incredibly helpful in starting your daycare.

7. Operations

Your operational plan should outline specific procedures your business and staff will follow. It will list employees and those in management positions and their responsibilities.

As in your management section, a detailed “chain of command” is essential. Staff are an important part of your operations and should be detailed here.

One of the most important aspects of a daycare operation is its location. It would be best if you addressed the following:

• The facility’s address
• The type of area it is in (residential, commercial)
• The space available and amenities
• Why is it a prime location
• Accessibility to the community for drop-off

You should also list your business hours and the services you will have available at different times. Child daycare centers differ in when they offer care—whether during the day, evenings, or even on weekends.

If you are doing other forms of daycare, you may even utilize late or overnight hours. You can decide how you run your business, but operations should be clearly outlined in your business plan.

8. Appendix

The appendix section allows you to include other documents that add to your business plan. They may include legal documents like licensing credentials, insurance information, and business formation documents.

Additional documents in this area are meant to support your business plan. The appendix might also include the following:

• Reference letters
• Photographs of the facility, locations, or general area
• Market research data
• Compliance Requirements

The appendix is a flexible section that lets you add supporting documents and other relevant information. Only add details that are helpful to your business plan. The appendix does not need to be lengthy or filled with fluff.

Legal Templates has the daycare business plan sample you need to construct your plan. With this sample at your disposal, you can formulate a business plan for your daycare to show to investors or for your purposes.

You may also use a business plan builder template to help you construct your daycare business plan step by step. See the sample below to help you get started.

• Lease Agreement
• Power of Attorney
• Non-Disclosure Agreement
• Eviction Notice
• Legal Resources
• Partner With Us
• Terms of Use
• Privacy Policy
• Do Not Sell My Personal Information

The document above is a sample. Please note that the language you see here may change depending on your answers to the document questionnaire.

Thank you for downloading one of our free legal templates!

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We hope you've found what you need and can avoid the time, costs, and stress associated with dealing with a lawyer.

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BUSINESS STRATEGIES

How to create a daycare business plan

• Nirit Braun
• Sep 11, 2023

When you're getting ready to launch your daycare business, one of the first things you'll want to do is create a solid business plan. Think of it as your roadmap for success. This document spells out your goals, strategies and financial projections within the childcare industry.

It serves as your trusty guidebook, helping you navigate the path to success and providing solutions for any challenges that come your way. Keep reading to learn more about the specific elements of a strong daycare business plan, and use the template at the end to get started.

Ready to launch your daycare business? Create a business website today with Wix.

Top benefits of creating a daycare business plan

Starting a daycare business demands careful planning, and a well-structured business plan offers numerous benefits that can significantly contribute to its success:

Helps raise money for your business : Experts estimate that for a home-based daycare serving four to six children, startup costs can exceed $36,000 . A comprehensive business plan is essential when seeking investors or financial support. It showcases your clear vision, market research and growth strategies, demonstrating your commitment and knowledge about the daycare industry. Potential investors are more likely to provide funding when they see a thoughtfully crafted plan that outlines potential returns on their investment.

Helps allocate resources : Writing a business plan forces you to conduct thorough research on what resources, supplies and staff are needed to launch and run your daycare center successfully. From facilities and equipment to educational materials and safety protocols, this detailed analysis ensures that you're fully aware of the startup and operational costs, preventing any unexpected surprises down the road.

Provides operational clarity : A well-constructed business plan outlines your daycare center's daily operations, including schedules, curriculum and staffing requirements. This clarity not only helps you understand the practical aspects of starting a business but also provides a structured approach to managing day-to-day activities effectively.

Highlights market insights : Through the process of writing your business plan, you delve into market research, identifying your target demographic, understanding their needs and analyzing your competitors. According to Zippia, 58% of working parents depend on childcare centers, which means you have a very large market to work with. This information is invaluable in tailoring your services to stand out in a crowded niche, creating a unique selling proposition that attracts parents and caregivers.

Helps with risk management : Starting a daycare business involves addressing potential challenges and risks. A business plan encourages you to identify these risks upfront and develop contingency plans to mitigate them. This proactive approach increases your preparedness and helps you navigate unexpected obstacles with more confidence.

Creates a profitability timeline : Financial projections included in your business plan offer insights into the revenue and expenses expected in the early stages of your daycare business. This information is crucial for determining when your business will become profitable and ensuring that you have a sustainable financial strategy.

Learn more: How to start a service business

How to create a successful daycare business plan in 6 steps

Now we’ll walk through the six essential steps for crafting a daycare business plan tailored to your company's unique needs.

Executive summary

Business and domain names

Market analysis and research

Operations plan, marketing and advertising plan, financial plan.

Thinking of developing another type of business? Check out more service business examples .

01. Executive summary

The executive summary is a concise overview of your entire daycare business plan. It provides a snapshot of your business concept, key strategies, goals and financial projections. While it appears at the beginning of your plan, it's often written last, after you've fully developed the other sections. A well-written executive summary should capture the reader's attention and convey the essence of your daycare business in a compelling and clear manner.

To write a clear executive summary for a daycare business, incorporate the following details:

Overview : Introduce your daycare business and highlight its unique features. Mention the age groups you'll serve, the educational approach you'll adopt and any specific services or benefits that set your daycare apart.

Demand : Describe the demand for daycare services in your target area. Mention any growth trends in working parents, shifting demographics or changes in government policies that could impact your business.

Operations : Briefly outline your strategies for attracting and retaining customers, managing operations efficiently and achieving growth. Touch on your marketing, staffing, curriculum and safety plans.

Staff : Highlight key members of your management team and their relevant experience in the daycare or education sector.

Financials : Provide a high-level overview of your projected revenue, expenses and profitability. Mention the timeframe you expect to break even and showcase your potential for generating returns for investors. You can also mention the amount of initial investment you're seeking and how you plan to use the funds.

Example executive summary for a daycare business

“ABC Sunshine Daycare is a premium childcare center dedicated to providing a nurturing and educational environment for children aged six months to five years. Our play-based curriculum, experienced educators and commitment to child safety make us the ideal partner for parents seeking top-tier care. With a projected 15% annual growth in working parents in our area, we are poised to tap into a significant market opportunity.

Our key strategies include partnering with local businesses to offer exclusive discounts to their employees, implementing a comprehensive child development curriculum and maintaining a low student-to-teacher ratio for personalized attention. We anticipate achieving profitability within the first 18 months, with a projected revenue of $350,000 by the end of Year 2.

We seek $150,000 in funding to secure a prime location, equip our state-of-the-art facility and launch targeted marketing campaigns. Our leadership team comprises experienced educators and childcare professionals, ensuring the highest quality of care for our young learners.”

02. Business and domain names

Knowing how to name a business is crucial for a daycare center and a key step before you register your business . It will be the foundation of your brand identity, influencing how parents perceive your services and creating trust. When choosing a name, consider its relevance to child care, its uniqueness and its ease of pronunciation and memorability.

Using a business name generator like one from Wix can spark creativity and offer unique suggestions that align with your daycare's values and mission. Once you've settled on a name, securing a matching domain name is essential for establishing an online presence. A domain name that reflects your business name makes it easier for potential clients to find you online.

You’ll want to first conduct a domain name search to ensure that the name you want isn't already in use.

Some best practices for choosing a domain name are to keep it short and memorable, which means avoiding complex spellings or special characters. Be sure to make it relevant to your specific services and values. The recommendation is to choose a domain extension (.com, .net, .org) that's familiar and commonly used.

03. Market analysis and research

Strong market analysis is vital for understanding the competitive landscape for this type of business and identifying opportunities where you can thrive. Research the demographics and psychographics of your target audience, their needs, preferences and pain points. Analyze your competitors—both other daycare centers and alternative childcare options—to identify gaps in the market that your business can address.

Incorporate this analysis into your business plan to develop a more robust marketing strategy . Highlight how your daycare's unique value proposition will resonate with parents and differentiate you from the competition. Include plans for pricing, branding, promotions and customer retention strategies to attract and retain families.

04. Operations plan

Your operations plan outlines the practical aspects of running your daycare business. This includes details such as:

Location: Explain the rationale behind your chosen location, considering factors like accessibility, safety and proximity to potential clients.

Premises: Describe the layout and design of your facility, including play areas, classrooms, restrooms and any outdoor spaces.

Equipment: List the equipment and supplies required for daily operations, from educational materials to furniture and safety equipment.

Staffing: Outline your staffing needs, including teachers, assistants and administrative personnel. Detail their qualifications, roles and responsibilities.

Healthy and safety: Highlight your health and safety protocols, emergency procedures and compliance with relevant regulations.

By including these details in your operations plan, you demonstrate a clear understanding of how your daycare business will function and meet the needs of both children and parents.

05. Marketing and advertising plan

To get started with marketing, you’ll need to develop a suite of brand assets, starting with a company logo. You can use a free logo maker to get a professional design in minutes.

Learn more: How to make a website

Your marketing and advertising plan outlines the strategies and campaigns you'll employ to promote your daycare business. Consider a mix of both traditional and digital marketing methods, such as social media. Utilize online platforms like Facebook, Instagram and Pinterest to share engaging content, showcase your facility and connect with parents. You can also use your social media accounts to collaborate with local businesses, pediatricians and schools to build a referral network and increase visibility.

Use your business website for targeted online ads to reach parents in your area who are actively searching for childcare options. Additionally, you could publish a blog on your website that offers parenting tips, educational insights and other valuable content that positions your daycare as an authority in child development.

You can also organize open houses, workshops, or parent-child events to give families a firsthand experience of your daycare's offerings.

06. Financial plan

The financial plan is a critical component of your daycare business plan, outlining your initial funding requirements, revenue projections and profitability timeline. Specify the sources of funding you're seeking—whether through personal investment, loans or investors—and detail how the funds will be allocated.

Provide a breakdown of your startup costs, including cost to start an LLC if relevant, expenses for facility setup, equipment purchase, staffing, marketing and any administrative costs. Present projected revenue based on enrollment estimates, pricing strategies and the competitive landscape.

Create a cash flow forecast that outlines your expected inflows and outflows over a specific timeframe. This projection will help you identify potential financial challenges and plan for adequate cash reserves.

Include a profitability analysis that showcases when you anticipate reaching break-even and becoming profitable. This information is crucial for both potential investors and your own financial planning.

By including a well-structured financial plan, you demonstrate your business' financial viability and your understanding of the financial aspects of running a daycare center.

Template for a daycare business plan

Note that this template is meant to serve as a starting point for your daycare business and you should customize it to reflect your specific business concept and goals.

A brief introduction to the daycare business concept

Market opportunity and growth potential

Key strategies for curriculum, staffing and marketing

Financial projections: revenue, profitability, funding needs

Company and domain name

Name: [Your Daycare Name]

Domain: www.[YourDaycareName].com

Demographics and psychographics of target audience

Competitive landscape analysis

How your daycare addresses market needs

Location details

Facility layout, safety features, outdoor spaces, etc.

Equipment, inventory and setup

Staff roles, qualifications and responsibilities

Health and safety protocols and compliance

Social media strategy

Local partnerships, collaborations with local businesses

Open houses and events

Online advertising plan and ad types

SEO and content marketing strategy

Initial investment requirement

Startup costs including facility setup, equipment, staffing and marketing

Projected revenue based on enrollment estimates and pricing

Cash flow forecast over the first year

Profitability and break-even point analysis

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Day Care Business Plan

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Safe Kids Child Care

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

There are an increasing amount of families who have become dependent on two incomes, which has created the necessity of the child care industry. Increasing need means that there are more children that are in need of a safe enriching place to go. 

Safe Kids Child Care will succeed by offering its clients’ children a safe and secure care environment, and close personal attention. The goals of the center are dual-sided: to help parents feel good about the care of their children, and to make it a safe, educational, and fun experience for the child. 

Safe Kids Child Care has a focus on meeting the local need for child care services within the 10-mile radius of Lynn. Children are taken in flexibly on either a full-time or part-time basis.

Competition

There are over 300 child care providers in the local area. The larger commercial chain child care centers, such as KinderCare, have a majority of the market share. These larger chains compete well because of a good reputation among the consumer market. Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.

 Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.

Expectations

Safe Kids is an exciting opportunity that provides safe and secure child care to the Lynn, MA neighborhood. Safe Kids will reach sustainable profitability over the next three years. Through a combination of well-priced services, outstanding customer service, and a well seasoned management team, Safe Kids will quickly gain market share and a reputation as a premier child care provider.

Financial Highlights by Year

Financing needed.

We plan on having $40,000 to start our business. Each owner will contribute $20,000 to our opening costs. 

Problem & Solution

Problem worth solving.

The child care market is quite competitive in the Boston area. There are over 300 different facilities. There are two general types of facilities. The larger style is commercially run, typically a corporate franchise center. These facilities are both regional and national. Currently, the four largest child care facilities in the USA account for 29% of the market. There are also many different smaller locally run and owned faculties. While the largest facilities can host between 20-100 children, the locally run centers typically have a maximum capacity of 20 children.

Target Market

Market size & segments.

Full-Time Working Couples

The company wants to establish a significantly large full-time regular client base in order to establish a healthy, consistent revenue base to ensure stability of the business. Customer relations are extremely important, as it is imperative to keep the parents pleased in order to keep their children in the daycare center.

Part-Time Workers / Drop-Ins

Part-time workers and drop-ins comprise approximately 20% of revenues. While this market is not the primary focus, sufficient flexibility to handle this secondary market is important to producing supplemental revenues.

Current Alternatives

Our advantages.

Child care competitive edge is the facility’s efforts in obtaining all appropriate licensing and certifications. Additionally, thorough pre-hire background screenings are performed on all individuals before hired for employment.

Keys to Success

Keys to success for the company will include:

• Maintaining a reputable and untarnished reputation in the community. 
• Quality care. 
• Competitive pricing. 
• Flexible hours.

Marketing & Sales

Marketing plan.

The differentiating effort will be benchmarked customer service. A customer-centric philosophy will be infused within the entire organization. Safe Kids will spend extra money to attract and train the best employees. This is especially important because it is the employees that interact with both the children and parents and will have the best chance to impress them enough to turn them into a loyal customer as well as to be vocal in telling their friends about their positive child care experience. 

We will have a Social Media Campaign which uses Facebook and Linked in. We will have experts answer child care questions if the public wants. This gives the public confidence that we know what we doing. We will have customer reviews and allow our customers to talk to us. 

Safe Kids Child Care will make a significant profit through the excellent care of children. Even though Safe Kids charges less, the company will see profit within the first year due to beneficial word-of-mouth advertising. The company expects to double its’ clientele every six months, for the first 18 months.

Locations & Facilities

The facility will originally consist of a 1,300 sq. ft. house in a quiet, residential neighborhood. The yard will be fully fenced in, to ensure no one can either come in or wander away. The yard will be furnished with safe, entertaining toys, as well as a sandbox.

Milestones & Metrics

Key metrics.

Our Key Metrics are: 

• Facebook page views, Twitter re-tweets, and new potential clients calling saying that a current client referred them. 
• The number of children we take care of daily 
• The number of children that are signed up for the monthly care 
• The amount of training our staff has to take care of children and keep incidents down to zero. 

Ownership & Structure

This business will start out as a simple proprietorship, owned by its founders. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suit the future business needs.

Management Team

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Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

Our key assumptions are: 

• There are children from families where both parents work or need to work. The children need somewhere safe and enriching where they can grow and make friends while their parents get a chance to get back to him.
• Adults sometimes have emergencies and they need to have a place to leave their children when they can’t be with them 
• The community appreciates the it takes a village mentality. They appreciate we have resources and experts that will answer their questions. We assume they will come to us if they need help, we won’t go out of our way to advise. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Our Start-up Expenses are $3000 including: 

Legal $1,000

Brochures $350

Stationery etc. $100

Activity Supplies $250

Food Preparation Supplies $300

First Aid Supplies $200

Cleaning Supplies $150

Nap Time Bedding $250

Sources of Funds

Our two owners will put up 20,000 dollars each, totaling 40,000. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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