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Are you in a bedroom community of a nearby city? Note down how your daycare is going to help these different kinds of parents. Also, keep in mind other factors: Are you in an area with large amounts of seasonal work where the workforce and population shrinks during winter or grows massively during summer? Like it or not, this will likely affect your revenue and enrollment, especially if you are offering part-time care.
In addition to analyzing your market, note your pricing structure, gross margin levels, and other nuts and bolts of your business model. Will you offer discounts, or accept government-subsidized or reduced payments from lower-income parents? What employee childcare discount will you offer? For detailed information on the size of your primary market, there are helpful resources, such as this guide from IBISWorld.
This insightful article from Forbes is also a good resource, and notes that the U. Bureau of Labor Statistics expects daycare to be one of the fastest growing industries in the next few years. Pay special attention to the obvious: What is the square-foot-per-child requirement in your town, city, and state, and what is the price-per-square-foot of the daycare center you plan to lease? These two facts are absolutely key to putting together a solid business plan.
You will generally need more square-feet-per-kid the younger they are i.
Day Care Center Business Proposal
Always leave at least 10 percent breathing room when calculating required square footage for the classroom sizes you want. Also, aim for using at least 60 percent to 80 percent of your daycare center on classroom size. That means you need a classroom of at least square-feet 20 multiplied by In noting the lease information on your business plan, aim to negotiate free months of rent with your landlord. Opening a new daycare takes a long time for construction build-outs, permits, licensing and many other factors—sometimes up to a year.
Explain this to the landlord. They want a tenant and commitment. Consider agreeing to a longer lease in return for a few months free or a landlord investment in build-outs. Alternately, the landlord may agree to defer rent in return for a larger security deposit or added monthly payments. Another thing to watch out for with monthly rent is all the added costs.
Make sure to find out if it is a gross or net rate. Take an average daycare center in a city that has, say, kids enrolled. How much market share do they have? What makes them strong and what are their weak points? Are there some more general impediments that could get in the way of flourishing, such as increasingly burdensome regulations in your state, or a lack of reasonably-priced leases to choose from?
There are a lot of regulatory requirements in the childcare industry a lot! They will help guide you through the regulatory process you have to follow both city or town and state regulations , but it is still entirely your responsibility to keep track of all the costs that regulations and requirements.
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Next, you want to list organization and management of your daycare center. What are the details of your ownership structure, board of directors, investor list, partners, and so on?
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Write down the responsibilities and roles of everyone on your team. List an advisory board if you have one, list all employee salaries, incentives, referral bonuses for recruiting, and all such details. Also in this part of your business plan, you want to be clear about the legal structure of your business in terms of incorporation, type of partnership I recommend a passive partnership and other such information. All percentages of ownership, investor details, stock details, and so on should be listed.
Profiles of staff, directors, investors, and board members should include everything from past track record to education and unique skills. Following your organizational details, you should describe your marketing plan. Budget-friendly marketing strategies are the name of the game here. In my case, I had great success with a marketing campaign where I put ads on the baby seat of grocery carts at a grocery store close to my daycare center. Having a solid marketing plan will help you get clear on your sales strategy.
Keep in mind that as enrollment goes up you will need more staff as well, in order to meet required student-to-teacher ratios. It costs a lot to start a daycare, and it takes time to get going, as I mentioned. This is normal. You should see profits start kicking in after an initial period of six to 12 months of operation. In terms of capital expenditures, the list is long, from monthly rent and utilities to staffing, construction, repair and supply costs as mentioned above. Digging deeper in these categories reveals even more items.
Infants need everything from towels and cubbies to cribs and toys. Preschoolers need crayons, games, tiny chairs, craft supplies, and much more.
Before You Start
List everything you can think of and then add more estimated cost. Get a contractor and tradesperson or two to quote you on the job so you have an idea what it will cost. That said, loans through the SBA can be standalone based on the viability of your business plan, so I recommend looking into them. If you buy a business, an SBA loan can also be a possibility.
Another funding source, of course, is to drum up investors.
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Some people turn to family, friends, or colleagues. I would recommend keeping it strictly business and avoiding family or friends. As you begin thinking about your clientele, you should also start thinking about how they like to be approached with opportunities. Creating a budget is a great way to start thinking of the financial success of your child care center.
Day Care Center Business Proposal
Be sure to factor in the wages of teachers and administrators, too. Building costs, safety materials, and various fees also come into play. Customizing the template to your business is critical. In addition to the expenses, you should also think about the type of child care center you plan to open. In our previous article, Picking the Right Child Care Structure, we outlined the general things to think about when picking the type of child care center you want to run.
Applying some of this same logic is relevant when creating your budget. In a franchise child care structure, you may need to devote some of your budget to an open house to show off your new facility upon opening. Keep your business structure in mind when creating your budget as each structure will have different needs. Child Care Aware has created one which you can find here. This document essentially shows where funds may flow in from and where you plan to allocate those funds. It can help you stay on top of funds within your facility.
At this point, you should have a lot of information available for your business plan. The next step is to put it all together into an easy-to-read document. Take the time to carefully articulate your meanings here. This document is not only designed to offer insight to investors about your business, but also to help you effectively communicate what you plan to do. Check out this template to help with formatting and idea generation.
Owners often find themselves dealing with the most pressing problems rather than thinking about how that problem aligns with their goals and objectives. If you start to stray, revisit your plan. You can use your business plan to stay on target. If things have changed, rewrite the sections that need adjustment. We're building the largest community of providers, staff, and teachers. To receive our newsletter and access exclusive content, tools, and resources, just supply your email address.
How to write a business plan for your child care center or preschool. Related Posts: Starting a daycare or preschool: in-home vs. Was this useful? Get more advice and tips!