How to Write a Child Care Business Plan

If you’ve been considering opening a daycare, there are many factors to consider. From budget and staffing to figuring out how much to charge parents, a lot goes into running a sustainable childcare business. The more work you do ahead of time planning and outlining how your business will run, the better. 

A business plan is a great way to organize all the elements of your program and help you share your vision with others more easily. We’re breaking down what should be included in a childcare business plan, along with a handy template to help you brainstorm.  

Overview:

• Executive Summary
• Market Research
• Staffing Plan
• Budget
• Revenue Plan
• Marketing Plan
• SWOT Analysis

What should be included in a childcare business plan?

The components of a business plan outline all the details of your business, from who it’ll employ to how you’ll make money. 

Start out with an Executive Summary

The business plan itself can be a lengthy document. The executive summary should be a summary of all the elements of your business, so the reader can get the gist of what the rest of the plan contains. 

The executive summary should include all the nitty-gritty details of your daycare such as the address, hours of operation, and the number of children it will serve.  It should also include what sets you apart from other daycares. The executive summary sets the tone for the rest of the plan so the more information you include here, the better.

Market Research

What makes you special? Carve out your niche

In the next section of your business plan, you’ll want to do a little research into the other daycare options in your area. This is where you want to justify the need for another daycare in you area and what will set you apart from the competition. 

Questions to ask yourself when doing market research:

• How many other daycares are there in the community vs how many children under five (you can use census information for this)
• Why are you the perfect person to open a new daycare in your community
• What is a problem currently not being solved by the other daycares in the area, and how will you solve it? Are parents needing longer hours? Are they looking for weekend care? 
• What special programming or enrichment will you offer 

Create a staffing plan

Who will work at your daycare?

Your business plan should include all the details about your staffing needs. In this section, you will outline the number of staff needed as well as any qualifications they’ll need to have. In your staffing plan you should also include:

• The titles for all employees and the qualifications needed
• A job description for each position you intend to hire for
• Salary and benefit information, as this is a huge part of your overall budget
• Information regarding management and supervision of staff

Breakdown your budget

In the next section of your business plan, you’ll want to break down your budget and operating costs. This will look different depending on whether you are opening a daycare in your home or a larger center. There may be unanticipated costs not included your budget, but the more in-depth your financial plan is from the beginning the more prepared you’ll be. 

Aspects to include in your budget:

• Costs for the space: Are you renting or purchasing a building? Do you need to remodel any rooms in your home or add an addition?
• Licensing fees: Getting your program up and running, including any necessary inspections and licenses needed will need to be factored into your budget. 
• Equipment, materials and furnishings: You’ll need to have child-sized furniture, toys and things like nap cots and cribs. 
• Staffing and training: How much will you be paying your staff and are you paying for benefits or training?
• Food: Are you providing meals and snacks? How much do you intend to spend on food?
• Maintenance: Your space will need to be maintained in order to keep it safe and fun for children. These costs might include cleaning supplies, janitorial staff, etc

You will also want to think about the total amount you’ll need to get started and where that money is coming from. Will you be taking out loans, applying for grants, or are you using your savings? 

Create a revenue plan.

How will you make money?

Most people go into the business of childcare because they love it but your program needs to be profitable to be sustainable. In this section, you’ll outline the fees families will pay to enroll their children and how many children you’ll need to enroll to be profitable. You’ll need to look back at the budget section, to make sure you have all your costs covered by the tuition families pay and still have money left over to pay yourself. 

You may also want to brainstorm additional income sources— for example, you can rent your space out on the weekends for birthday parties or offer evening enrichment programs. 

In the revenue section, you’ll want to outline projected costs and profits for the first few months and years. This is how you’ll be able to see whether you have a sustainable business or if you need to make some tweaks over time. 

Create a marketing plan.

How will you spread the word about your daycare?

You’ve spent all this time and money setting up an amazing program, but how will you attract families to your daycare? This is where a marketing plan comes in handy. You’ll want to think about all the ways you can market your business and any costs associated with marketing and advertising. 

Ideas for how to market your daycare and recruit families 

• Social media: Set up social media accounts for your daycare and share photos of the space, staff, and what makes you unique. 
• Take advantage of Winnie: Winnie is a childcare marketplace where over 15 million families go to search for daycare in their area. You can set up your profile for free, but they offer additional marketing and advertising features with their subscription service, Winnie Pro. 
• Show up where the families are: Create flyers or postcards and hang them up everywhere families are— local grocery stores, libraries, pediatricians' offices, and community spaces are great places to start. 
• Form relationships: Networking and collaborating with other local businesses that serve families is a great way to get referrals and spread the word about your daycare.

What obstacles will you face and how will you overcome them?

It would be great if everything went smoothly and your business was successful from day one, but it’s important to plan for any bumps in the road. The best way to plan for any challenges you’ll face is to do a SWOT analysis.

SWOT is an acronym that stands for:

• Strengths: What does your program do well? What do you offer that no one else does?
• Weaknesses: What resources are you lacking? Where do you struggle?
• Opportunities: How are you making the most of what you already have? What will you take advantage of to help you achieve your goals?
• Threats: What is the competition like in your area? Can the families in your community afford your program? What obstacles will you face?
  
  

No matter where you are on your journey to opening your dream daycare, Winnie can help! Create your free profile today and explore our marketing and hiring features to help you grow your business online.