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Leader Resources » Ministry Basics » Event Ideas

Looking to Start a Church Day Care? Start Here.

Published: January 24, 2020

Meet the needs of children and their families in your community by starting a daycare in your church.

Many churches searching for the “perfect” outreach ministry may find it in the children who are sitting on their knees or snuggled in the arms of the people they want to reach. That’s because the most important decision employed parents make is choosing who will care for their children while they work.

Why should a church consider sponsoring a day care center? In their book Early Childhood Ministry and Your Church , authors Kathleen Seaton and Linda Rothaar state, “A healthy congregation is one in which there is an awareness of the real needs in the community, respect and love for all people, and a gospel-driven drive to serve others.”

Michele Marr, communications director of St. Matthews Episcopal Church in Newport Beach, California, says 12 desperate parents call every week inquiring about day care. As a result, her church is praying about and researching the possibilities of opening a facility. “With so much publicity about child abuse,” says Marr, “parents tend to prefer a church day care because it feels safer.”

What better way to meet families’ needs in your community than inviting children and families into a church-sponsored day care?

Reaching Out

Churches with day care facilities have a sense of mission. Robin Reed directs Carpenter’s Kids, a preschool for nearly 400 children under the age of 6. Her church, South Haven Baptist of Springfield, Missouri, considers its facility a ministry of the entire congregation.

“Families need to have a place where they can feel unconditional love,” she says. “They want an environment where their children’s total needs are met—spiritual, physical, emotional, and academic.”

Smaller facilities find that size does not limit their outreach to the community. Gayle Beeler, of Grace Evangelical Free Church in Longmont, Colorado, purposely involves the 30 children in her preschool in community activities. Whenever the children are out in the community, others notice that these children attend a church-sponsored day care. It’s another way to let people know about your church.

Making the Decision

Consider these issues when deciding whether a day care center is an option for your church.

What are your community’s needs?

How many facilities already exist in the area? What needs do they meet in terms of hours, ages, and philosophy? Research the information to make a sound decision. Then present your research in a congregational meeting.

Does your congregation have a sense of mission for a day care?

Beeler worked at a public facility before approaching her pastor about the possibility of opening a day care in her church. She was delighted when the congregation latched onto the vision of such an outreach.

What is the day care capacity of your building?

Classroom space doesn’t necessarily constitute a day care center. What are the licensing requirements in your particular state and community? Each state has its regulations for employee qualifications, space needed per child, insurance requirements, and more. Consider that some insurance companies require training and safeguards for sexual abuse. Call your department of social services for licensing information, and check with your local council of churches to see if there have been any difficulties with other congregations obtaining licensing.

How will the day care affect your congregation?

Will you have a separate area for the day care, or will you use Sunday school classrooms? Renting to an outside party can cause problems in sharing space, time, and materials. This is why most directors feel it’s important for a facility to be operated by the church. Cooperation is important when rooms are used for Sunday school, church clubs, and day care activities.

What ages of children will you provide care for?

Will you provide primarily infant and preschool care, or will you also have an after-school or summer program for older children? What hours will you operate? Tailor your programs for the typical working schedules and commute times in your area.

Do you have the financial resources needed to start a child care center?

You’ll need to pay salaries, purchase supplies and equipment, and cover insurance and licensing fees. Will the center make payments to the church for use of the building? Or will the church subsidize the center by not charging rent or utilities? What about providing scholarships to needy families? It might take several years for the center to establish itself financially.

Who’ll work in your program?

This is a major factor in deciding whether to open a center. If you want your staff to have a vision for your ministry and a genuine love for kids, consider: Staff members should belong to your church, and they must able to affirm a personal faith in Christ. And day care providers should be more interested in caring for children than talking with each other.

Once you decide to set up a church day care center, develop the purpose of your ministry. Why are you going to do this as a church? If you want to minister to families, this should be the entire congregation’s goal.

Develop a mission statement.

Most mission statements include the goal of meeting the needs of children and families and sharing the gospel of Jesus Christ. Your mission statement should also make a commitment to high standards of excellence in providing for the physical, social, emotional, intellectual, and spiritual well-being of children-regardless of racial, religious, or economic backgrounds. Keep your written mission statement to two to four sentences. Give it to parents and congregation members. A written mission statement will ensure that your purpose is clear.

Start small.

Offer only one class. Then develop a sense of how to deal with the issues that’ll invariably arise. Later when the program has grown, there will be a strong foundation to fall back on.

Our society today is a working society. Children need day care, and opening a church day care meets families’ needs. Not only can you care for children’s everyday needs, but you can also introduce them to the gospel. When you open a church day care, you’ll be fulfilling the command of Jesus when he said, “Let the little children come to me.”

Carla Williams is a freelance writer in Colorado.

Want more articles for children’s ministry leaders? Check these out .

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15 thoughts on “ Looking to Start a Church Day Care? Start Here. ”

I have church retreat held on Jun. Can you provide child care?

Hi Katrina! Unfortunately, we’re not a childcare provider. You could look for volunteers in your church, though!

Hello, My name is Jenni and I’m a missionary in Thailand. I’ve been here for 11 years and have always felt the Lord leading me to start a Child Care Center. I’ve been working in a Thai church, in a village, for 6 years now and I feel like the Lord has been opening doors to start a center here. It is a need for the church people and I believe many villagers will be inclined to want their children to come here too, simply because I’m a native English speaker. I thank you for your short article on how to get started, it was helpful in getting the brain wheels turning. I’m really having an emotional struggle because, well, I’m afraid of failure. Will you please pray with me on this? Pray that 1. I will not get ahead of God and 2. God will show His clear Hand in this new adventure I’m taking with Him.

Thank you so much,

Your Missionary in Thailand, Jenni

Wow, what an exciting adventure, Jenni! We’re praying that you feel God’s peace and presence!

Hello We’re starting a daycare and my question is, should we anticipate growth numerically in the church. What are some ideas to bridge the daycare with some Sundays services.

Elder Kristie Ford

Hello there! A daycare can increase the numbers within your church. One great way to bridge the gap is to invite day care attendees to major outreach events such as VBS or a fall fest.

Hello I Am Noah from Hillcrest We don’t have a children daycare center but in my heart I have a desire to start it because I do believe it can helps our kids to grow with a God’s nature build in them and God had put in my spirit how we should groom them in this wicked world.so I need an advice from your side what we should do or where to start

Hi Noah! Feel free to review this article and other articles on our site for guidance.

i would like to know do you need a license to have daycare in your church

Hi there! Each state may have different requirements, I would try to research what the requirements are for your state.

Hi I live in the state of Georgia and we are looking start a Daycare in our Church. Would I need to apply for an EIN number separate from our Non-Profit Tax Exempt Ministry? I am the wife of the Pastor and I would be the director of the Daycare. We would use the church building and pay for utilities, etc. The employee at this time would not be a part of the church ministry because we are a small ministry. Just needed to be pointed in the right direction

Hi Debra! I would try to contact your local department of revenue or the IRS to get answers to your questions.

My church is looking to start a daycare program. can you give us a good starting point.

Hi there! This article helps give you a starting point of the areas you should focus on when tryng to start a church day care. We also have several articles on how to recruit volunteers and ensuring to get background checks done for child safety. Here’s a few links to some of those articles: https://childrensministry.com/safety-awareness/ and https://childrensministry.com/volunteer-recruitment-strategy/

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If you’re a teacher, former teacher, or simply have years of experience caring for children — and an entrepreneurial streak — you might have considered starting your own day care center, either from home or in a dedicated facility. And at an expected job growth of 7% over the next decade, working in child care is a stable career choice. So, if you’re seriously wondering how to start a day care center, you’ve come to the right place.

As is the case starting a business in any industry, however, your passion for your craft alone — or, in this case, your students — isn’t quite enough to ensure that your day care business is copacetic, either financially or legally. You’ll need to do a good amount of due diligence when looking into how to start a day care business, paying special attention to licensing requirements, and ensuring that your facility and program aligns with your state’s health and safety codes.

If you’re a pro at educating, training, supporting and generally corralling large groups of small children, you should be pretty unperturbed by the work it takes to start a day care business. Here’s what you need to know.

How to start a day care business

Although every path toward starting a business looks different for every business owner, there are a few steps that every aspiring day care owner needs to think about when it comes to how to best start a day care.

1. Decide what kind of day care business you want to start

Before you can even get to writing a business plan for your day care business, you need to decide what kind you want to open. Look into whether you want to start a day care business at home, or whether you want a more commercial facility — there might be different permits required in your municipality depending on which you choose. You also need to decide what age groups you want to focus on.

Next up, you'll have to decide on a business entity, which will have huge effects on the way you're taxed and how you operate your day care business. Will you have partners or open your business on your own? Additionally, you'll want to consider whether you want a business entity that offers you some protection. Making your day care center a limited liability company might be a good move, since the business will take on liability should anything go wrong.

You might also decide to buy into a day care franchise opportunity. This option will significantly streamline the steps you need to take in opening your day care.

Once you narrow down these details about your business, you can move on to the next step in starting a day care business: writing a business plan.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. Write a day care business plan

This is a step you have to take when starting any business and it can be quite a bit of work, especially for anyone looking to get moving quickly on their business. When you start writing a business plan, start with an outline of all the things you want to include.

Your plan should include a summary, an overview of the company, a market analysis that includes an assessment of the need for a business like yours, a marketing and sales plan, and a financial plan along with financial projections. Don't worry, though, you can always add to it as your business grows.

One thing you should include, though, is market research. The last thing you want to do is go through all of these "how to start a day care business" steps, only to find that there isn't a market for one or that there are already too many day cares in that area to make it a viable business.

Your business plan should also include a budget. The costs associated with opening and running your day care center can never be accurately totaled, but nailing down a budget will give you some parameters to work within (and some peace of mind).

In your budget plan, don’t forget to factor in:

Your startup costs, including day care equipment, food, toys and educational tools, wages, insurance and licensing.

How much tuition you’ll charge.

Your predicted revenue over the next two to three years.

When you’ll break even.

Also know that day care centers can claim certain tax deductions, which can ease your annual financial burden.

You'll also want to include a marketing plan. If you’re seriously researching how to start a day care business, it’s likely that you’ve already been caring for children in your area for some time and have built up a network of local parents. That’s one valuable method of attracting customers (aka word of mouth) covered. Still, implementing even a basic marketing plan can help define and legitimize your business — and if you need to implement a waitlist as a result, that’s great too!

Your marketing efforts can be relatively simple and low-cost. You can start by creating a Facebook page for your day care center and building a business website, making sure to include your contact information and a little bit about your business. If possible, plan to include pictures of your facilities and testimonials from happy customers.

If you’re a fan of social media, it also can’t hurt to create an Instagram, LinkedIn and/or Twitter account to keep both current and prospective customers updated on your business. Just be sure that once you do, you receive permission from parents or guardians before posting pictures of their children, of course.

Analog marketing techniques would work well here, too. If possible, consider distributing flyers or brochures to nearby libraries, schools, places of worship or any other local gathering spots.

3. Obtain the necessary certification and licenses

You may not need a master’s degree in education to become a day care teacher, but each state does require some combination of licensing and certification when it comes to how to start a day care. Visit your state’s Division of Child Care Services (or its equivalent) to find out the training, experience and credentials you need to legally operate a day care facility.

In New York State, for instance, the head of the day care facility must have one of the following:

An associate degree in early childhood education or an equivalent.

A CDA credential (child development associate) and at least two years of experience caring for children.

A high school diploma and at least three years’ experience caring for children.

You'll probably find that there are some other requirements that usually come up when you're looking up how to start a day care business at home or in another facility. Your state may require that you and any staff you hire are CPR-certified, for one. Another point of safety to remember is that you should be trained in at least basic first aid for children. You and your staff might also need to be fingerprinted and undergo background checks before being cleared for work.

Even if your state doesn’t require that you obtain a license, you should consider doing so, as your licensing course will go over all the boxes you need to check to operate your day care in your state — including health and safety regulations, proper food preparation and the required child-to-adult ratio.

4. Find a (safe) day care facility

In certain states, in order to obtain the proper licenses or registration to start your day care business, you’ll first need to show that your day care facility meets your state’s health and safety requirements.

So whether you choose to open your day care facility in your own home, or buy or lease a new property, you’ll need to make sure your facility meets zoning, fire, and health and safety laws. When it comes to how to start a day care at home, you may need to make alterations to your house to comply with day care requirements in your state, so be sure to factor them into your budget.

5. Get insured

Another requirement for obtaining your license? Getting insured. In certain states, you’ll need to be licensed by the Department of Health and Human Services to run your day care center, but to do so, you’ll first need liability insurance.

The exception is home-based day care centers, which don’t need insurance to be licensed by the DHHS. Still, those opening day care centers at home should seriously consider obtaining small business insurance. You always run the risk of a lawsuit when you’re running your own business, but that risk increases when caring for other people’s children — so protect yourself whenever possible.

There are several types of insurance that cover day care businesses — general liability insurance, workers’ compensation, property insurance, abuse and molestation insurance and others — so contact an insurance broker to help you decide which coverage is best for your business.

6. Get a business checking account and credit card

Get a business credit card and a business checking account early on to help you keep your business expenses separate from your personal expenses when first starting a day care.

It’s crucial to separate your personal and business expenses for many reasons, not the least of which is to reduce your (or your accountant’s) burden come tax season. It’s simply the most professional way to conduct your business, too. Set yourself up for success now by signing up for a business credit card and opening a business bank account, and be diligent about using both solely for your day care’s finances.

Having a business credit card can help you increase your business credit score, too. By paying the card off on time — or early if you can — you can boost your score, which will help you late on when you need a loan or other financing for your day care business.

7. Get financing

Most entrepreneurs bootstrap their businesses at the beginning, as it’s difficult for brand-new businesses with limited credit history to secure a business loan, either from a bank or from an alternative lender.

Your financing options aren’t limited to your own purse strings (or your friends’ and family’s). Here are a few other ways to get funding and loans for a child care business:

SBA microloan

Although most SBA loans are available only to businesses with a few years of experience under their belts, SBA microloans are actually designed to help startups get off the ground. They’re especially accessible to women, veterans, minorities and business owners in low-income areas. And unlike most other SBA loan programs, SBA microloans are disbursed by nonprofit lenders, rather than banks.

As the name suggests, SBA microloans tend to be on the smaller side, with amounts capped at $50,000, but they may be as low as $500. (For more context, the average microloan amount was $14,000 in 2017.) And because microloans are designed for new businesses, business owners with average or even challenged credit may still be accepted, as long as other aspects of their SBA loan applications are in good shape.

SBA community advantage

These loans from the SBA have all of the advantages that come with SBA microloans but the community advantage loans are specifically for businesses that are serving traditionally underserved communities. These loans are generally for a higher dollar amount than the microloans and can go a bit further for your business.

Government grants

You might be able to obtain financial assistance to start and run your day care through state or federal funding programs for early childhood education providers. For instance, you can contact your state’s Child Care and Development Fund Plan to look into startup funds, or your state’s school meal contacts to seek funding for your day care center’s meals.

Take a look at the Administration for Children and Families Office of Child Care’s list for a more comprehensive overview of federal and state financing programs for child care centers .

Business credit card

It’s important to use a business credit card to keep your day care’s expenses separate from your own. Of course, using a credit card is also the most convenient way to pay for your daily expenses. And since credit limits for business credit cards tend to exceed those of consumer cards, you can spend more liberally without worrying about maxing out your card.

Another bonus? Using your business card responsibly (by which we mostly mean paying off your balance in full and on time, every month) can help you build business credit. And with a healthy business credit score, you’re in a better position to secure business loans with great terms down the line.

If you opt for a card with a long 0% intro APR period, you can essentially use that introductory grace period as an interest-free loan. Look into the American Express Blue Business Plus card, which, at 12 months, carries one of the longest interest-free introductory periods in a business credit card right now.

After your 12 interest-free months are up, though, a variable APR kicks in at a rate depending on your creditworthiness and the market. Check the issuer's terms and conditions for the latest APR information.

8. Hire staff

You may be planning on running your day care facility solo, but depending on your state and the number of children you’re looking after, that might not be an option — every state sets a required ratio of staff to children to ensure that every child receives adequate care. They also dictate the maximum number of children permitted in a group.

Adult-to-child ratios and class sizes depend on the age of the children, but they might also depend on the size of the day care facility, or face further restrictions based on municipality. For a day care center in New York state, for example, the state requires one adult for six children under school age. However, in New York City, there must be two teachers or one teacher and one assistant to every six children aged 2 to 3, with a maximum of 12 students allowed in a single group. Your own children may or may not be included in that count, too.

So, while hiring really depends upon your state’s requirements, it makes sense to leave room for hiring staff in your business budget. That way, you’ll be prepared for growth, without worrying about your operation shutting down because you’re not properly prepared for it. (Just keep in mind that any staff you hire needs to be appropriately licensed or trained for it, and potentially undergo a background check.)

Start Your Dream Business

9. Write your day care contract and policies

To further legally protect your business, it’s crucial that you draw up a contract, write out your day care policies, and require that potential clients (or, more likely, the parents of potential clients) review and sign both documents before accepting their patronage.

If you're just starting to read up on how to start a day care business, you might not be clear on the distinction between these two documents. To clarify, your contract is the document stating that you’ll provide child care, be compensated for providing care according to the payment terms you specify, and have the right to terminate providing care.

Your policies, on the other hand, provide parents with important logistical information regarding how you’ll run your day care center. There, you can outline protocol regarding vacation, illness, inclement weather, drop-off and pickup times, curriculum, field trips, and anything else you believe is important for your clients to understand and agree to about your day care center.

On a similar note...

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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Ultimate Guide To Church Business Plans: How To & A Free Template

When you hear someone refer to a church as a business, I don’t blame you if you shudder a little bit. The idea of any church running itself as a traditional business is alarming and, rightfully so. That said, the church is technically a business/organization under the government and we can learn from companies through […]

When you hear someone refer to a church as a business, I don’t blame you if you shudder a little bit. The idea of any church running itself as a traditional business is alarming and, rightfully so. That said, the church is technically a business /organization under the government and we can learn from companies through features like a church business plan. 

A church business plan takes the idea of laying out a document with everything someone needs to know at a glance about an organization. Instead of making it about maximizing profits and return on investments, though, it is about building the Kingdom of God. 

In my time serving in a large church, I find the most successful and growing churches nail down an efficient church business plan. 

I’ll cover:

What is a church business plan, why do you need a church business plan, what should be included in your business plan.

• How To Create A Business Plan For Your Church

Church Business Plan Template & Sample

At its core, a strategic plan isn’t too much different from one you might find in a standard brick-and-mortar store. The idea is to lay out who your business (religious organization, in this case) is, what its purpose is, and how you will go about accomplishing your goals. 

A church business plan doesn’t have to be as detailed or extensive in its raw data, specifics, and legal jargon like you might find in a regular business. It is possible to shrink it down to a single page where you succinctly and adequately describe the top level details of your church. 

A church business plan is a straightforward, technical document. It can include some of your more passionate ideas but this page should essentially be as dry as can be.

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There are a few reasons why you need a strategic plan, starting with the fact that you should take your church’s plans seriously. If you want to be taken seriously by others and experience church growth, building out a clear plan can help with that. 

The point of the church business plan is to show yourself and your staff members the steps moving forward for your church. Laying this out for your church staff will ensure that everyone is on the same page with a clear focus in front of them. 

This is especially crucial for any new church staff members you add to your team down the road. They weren’t with an original church leader when you first formed your vision and goals, so a business plan can be part of orienting them to your team. 

It goes beyond your church’s four walls, though. A church strategic plan is also essential for partnering with third-parties, be it investors, businesses, charity organizations, donors, and even other churches in your community. 

A business plan that you bring to the table immediately informs and shows the potential partner how serious you are about your business. Since few churches do this from my experience, I find that organizations are more willing to work with a church plant with an actual plan. 

The strategic planning process can be daunting, especially if you don’t have a professional on your team with experience with these. I find that a business plan for a church doesn’t need to be as lengthy or specific as one with an actual for-profit company or startup .

That said, there are some bare minimum sections and features you should absolutely include in your church business plan. Here’s what you need:

• Executive summary (can go by a different name as you will see in our template)
• Values and vision for your church
• Mission statement
• Current goals (both short-term and long-term)
• Plan of action for how to strategically execute those goals
• List of ministries and current staff members
• Financial (can be included in the prior section)

How To Create A Business Plan For Your Church?

When it comes to creating a church business plan, it can be a group effort between a few core staff members. I find this helps alleviate some of the stress and ensures that everyone’s ideas shine through. As mentioned, you can absolutely cover a business plan on a single page or even two without sacrificing the importance of it. 

1. Values and Vision (Executive Summary)

A business plan should begin with the overview of your church and what will be addressed below. Businesses call this the executive summary, but I like to call this area your values and vision. This is where you break down what your church stands for, what it believes in, and what it wants to do. 

This is a brief section, only meant to be a couple of paragraphs at best. I like to divide it between the now (what you believe in and currently do) with the future (what you are praying to see happen). Keep this section as brief and engaging as possible to hook in the reader who might just help you make this all happen. 

2. Mission Statement

Your mission statement should be its own section when it comes to a church business plan, not included in the previous area. This is because your mission is why you are doing what you’re doing. It is the central mantra of your church and should be given the spotlight it deserves. 

The mission is your ultimate goal for your church, which you can word however you like. Any variation of building out the Kingdom of God or seeing everyone become believers works in this case. A couple of sentences or a short paragraph will do here. 

3. Current Goals

This third section is where we get into the nitty gritty of the church business plans. In this area, you lay out your current goals. While your mission statement is to see the whole world believe, your goals are smaller, more focused ideas that you can actually tackle with your church alone. 

These should include both short-term and long-term goals that your church has. A short-term goal might be something like completing the renovations of your sanctuary and buying a new piece of land. A long-term goal, though, could be to take that new land and build a homeless shelter or food bank for the nearby community. 

4. Plan of Action

Your goals and ideas need action to make them happen. This is the section where you detail the strategies you have for tackling your various goals. This could be noting that you need X amount of budget for Y purpose and go over the exact steps needed to happen. 

Your Plan of Action section can take up several pages on its own, so I prefer bullet points here that you can elaborate on in separate documents or meetings . Other Plan of Action could include smaller steps that build up to the greater goals. 

For instance, if you want a new piece of land for creating a new children’s center for the congregation, this is where you note steps for that. It could include meeting with nearby landowners, garnering interest from investors, doing fundraisers to gather funds for it, and finding the right construction company.

5. Ministries and Staff Members

This final section is a bit of a catch-all area. You want the people you’re possibly partnering with or hiring onto your staff to know more about your church. Here, I like to list out all of the core ministries that you have at your church, a very brief description of them, and your staff members. 

That is rather straightforward enough, but it gives someone who might not regularly attend your weekly church service a better idea of it. In addition, I also like to include any financial areas in this section. 

If you want the person to know how much your church brought in last year, your current capital, and monthly costs, this is the place to do it, or create a separate section for it entirely, if you feel it is necessary. 

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You can find my church business plan template here (simply click the link and make a copy of the document to edit). This blank template offers you the sections that I believe are crucial to any church serious about organizing its ideas for possible partners.

In addition, I included a sample of a filled-out business plan that offers a look at what you should include in each section. This sample isn’t directly taken from any one church—I used a made-up church in this case—but it is taken from some of the elements of past churches I worked with. 

Plan For The Good And The Bad

The church business plan is a document used for information, growth, and investment in your church. For the most part, everything surrounding this plan is dealing with the hopefuls and positives. But you also need to plan ahead when it comes to the negatives, too. 

There are struggles, disagreements, and issues that will inevitably happen when we come together to make a real change in the world. For those situations, a business plan won’t help in the slightest. I recommend creating a church risk management plan , which is there to mitigate and solve issues that can and will pop up. 

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Daycare Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Daycare Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Daycare Business Plan

You’ve come to the right place to easily complete your daycare business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their daycares.

How To Write a Daycare Business Plan & Example

Below are links to each section of your daycare business plan template:

• Executive Summary – This is a brief overview of your daycare business plan. The executive summary should be no more than 2 pages long, with brief summaries of other sections of the plan.
• Company Overview – This is where you provide a business description, including your company history, business structure, and any pertinent information about the daycare center.
• Industry Analysis – The industry analysis describes the daycare industry, including market size and trends.
• Customer Analysis – This section of your daycare business plan describes your target market and potential customers. You will detail the demographics, needs, and wants of your target audience and how you plan to meet those needs.
• Competitive Analysis – The competition in your local area will be described here, along with how your daycare business will compete in the market.
• Marketing Plan – Your marketing plan will describe your daycare’s marketing strategy, including your advertising and promotion plans.
• Operations Plan – This section of your business plan describes how your daycare will be operated on a day-to-day basis. It may also include your long-term plans for expansion and the milestones you want to achieve to get there.
• Management Team – The management team section of your business plan should describe the experience and qualifications of your management team including the director, teachers, and support staff.
• Financial Plan – The financial plan section of your daycare business plan should include your financial statements, such as your income statement, balance sheet, and cash flow statement.

Next Section: Executive Summary >

Daycare Business Plan FAQs

What is a daycare business plan.

A daycare business plan is a plan to start and/or grow your daycare business. Among other things, a good daycare business plan will outline your business concept, identify your target customers, present research about the child care industry, detail your marketing plan, and provide your financial plan.

You can  easily complete your daycare business plan using our Daycare Business Plan Template here .

What Are the Main Types of Daycare Businesses?

There are different types of daycare businesses that parents can choose from for their child's needs. A traditional daycare center is most sought after by working parents since it provides child care during regular work hours. There are also in-home daycare centers that are licensed to provide child care in a home setting with fewer children. Other child care centers provide hourly care services by trusted babysitters or nannies and are operating on an as-needed basis.

What Are the Main Sources of Revenues and Expenses for a Daycare Business?

The primary source of revenue for a daycare business is its child care services.

Some key expenses for a daycare business is rent, salaries for staff, utilities and snacks expenses for the children.

How Do You Get Funding for Your Day Care Business Plan?

A daycare or child care center is typically funded through small business loans, personal savings, credit card financing and/or angel investors. This is true for a business plan for daycare or a childcare business plan.

What are the Steps To Start a Daycare Business?

Starting a daycare can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Day Care Business Plan - The first step in starting a business is to create a detailed child care business plan that outlines all aspects of the venture. This should include market research on the childcare industry and potential target market size, information on the services you will offer, marketing strategy, pricing strategies and detailed financial projections.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your daycare business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your daycare business is in compliance with local laws.

3. Register Your Daycare Business - Once you have chosen a legal structure, the next step is to register your daycare business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your daycare business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Daycare Equipment & Supplies - In order to start your chlidcare business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your childcare   business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising to reach your target audience.

Learn more about how to start a successful daycare business:

• How to Start a Daycare Business

Where Can I Get a Daycare Business Plan Example PDF?

You can download our daycare business plan PDF template here. This is a business plan template you can use in PDF format.

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The ultimate guide to starting a daycare business.

Why Start a Daycare?

Advantages to starting a daycare, can you start a daycare from home, how much does it cost to start a daycare, 15 steps to starting a daycare center, resources for daycare owners, bottom line.

Since most parents work outside the home, most preschool aged children receive some form of child care. While many are cared for by nannies, babysitters or other family members, nearly one-quarter (23.4%) of children under age five attend an organized daycare center. 

This presents a world of opportunity for those looking to take the next step and start a child care business of their own. Starting a daycare center can be both personally fulfilling and financially rewarding.

Do you want to open your own daycare center in the U.S.? Follow along with this guide as we reveal the step-by-step process for opening a successful child care business. 

Opening a daycare can be intimidating, but it can also be incredibly rewarding. While there is no blueprint for success, many child care business owners find joy in the journey. So whether it’s your passion for kids or desire to serve parents in your community, there are many valid reasons to open a daycare. 

What’s important is that you also need to consider your own unique reasons for wanting to open a daycare, as these reasons will then motivate you to follow through on your dream. Even though you will face obstacles along the way, the payoff of opening a daycare is certainly worth the struggles.

Starting your own daycare business can be advantageous on multiple levels. For one, you’ll have the personal satisfaction of starting your own care center from scratch. Then, there’s the joy of spending time with children and learning life-changing lessons along the way.

If you’re still on the fence about starting your own daycare, consider these likely advantages:

• Emotionally rewarding: Working with kids teaches you to be patient and enjoy the simple things in life. You’ll also have the flexibility of having your own business versus being confined to a traditional day job.
• Financial freedom: By opening a daycare, you’re in control of your income rather than reliant on a typical paycheck. You can maximize your earning potential and make investments back into your own business.
• Personal child care: If you have your own child, you can care for them while you’re running your daycare. This will save you money and give your offspring opportunities to make friends with other kids. 
• Continued education: Opening a daycare can open the door to new opportunities in the field of child care. You may be presented with another job position or choose to pursue additional education of your own accord. 
• Extra money: Rather than stay home and care for your own children for free (assuming the original plan was to be a stay-at-home parent), why not make some extra money by caring for other children at the same time? 
• Tax deductions: As a business owner, you can write of certain expenses as business expenses, saving you money on your taxes. These expenses can include a portion of your housing payment (if you have an in-home daycare), your cell phone bill, your vehicle, child care supplies and more. See Tax Deductions . 

These are just a few of the many advantages of starting your own daycare center. Now let’s address some common questions you may have about being a daycare business owner. 

Yes, starting a care center from your home is an option and may even be the more affordable option. This is because there are different options at the local, state and federal level that provide grants and funding to in-home daycare centers.

If you already have the space to run a child care business out of your home, it’s worth looking into Small Business Administration (SBA) loans to help you fund your endeavor. Remember, at the end of the day, you may be eligible for tax cuts and other benefits.

According to small business website bizfluent.com , the average startup cost for a daycare center is $10,000 to $50,000. This can vary widely depending on whether you’re opening a home-based daycare or leasing a separate facility for your care center. 

If you don’t have $10,000+ in your bank account, don’t worry. There are many grants and loans available to child care businesses. In fact, some local businesses will offer financial incentives to support budding child care centers. Consider reaching out to your community for support.

Now, let’s get to the good stuff: how to start your own daycare business from start to finish!

Starting a small business in general is always a journey. While we’ve outlined a few steps to getting your business up and running, know that there is no one “right” way to achieve success. You’ll learn many lessons along the way and are likely to pave your own path.

That said, here are 15 steps to starting your daycare center, even if you have zero experience.

1. Learn About Daycare Licensing Requirements

You might have started off as a babysitter or a nanny, but in order to start a full-on daycare business, you need to meet the proper licensing requirements in order to be legal . That way, your daycare will be legitimate and you won’t run into any legal trouble accepting children into your care. 

A good first step is to contact your state’s Department of Children and Family Services (DCFS) to learn about their specific regulations for child care providers. Another option is your local area’s child care licensing agency. You can usually find this information online. 

To obtain a license to start a daycare center, you’ll also need a current CPR certification, a clean driving record and additional documents that prove your commitment to providing quality child care. Don’t be afraid to ask your local agency questions to ensure you’re satisfying all requirements.

2. Consider Taking Early Childhood Education Classes

While you don’t need to have professional child care experience to start a daycare business, having some understanding of early childhood development is strongly encouraged. You’ll be caring for young lives, so you need to know how to provide the right kind of support and care.

Getting a degree is early childhood education is a good place to start. You can typically find classes in-person at your local community college or online. Through this degree, you’ll gain a greater understanding of how children think and behave, and what they need in order to be properly cared for. 

Beyond that, you’ll have the skills to set your business apart from your competition. You’ll be better prepared to offer the services parents are looking for and keep them coming back time and time again.

3. Create a Daycare Business Plan

In starting any type of small business, it helps to have a business plan. Having a business plan helps you set tangible goals for your business, organize your business structure, outline your services and so much more.

In your daycare business plan, you’ll define your daycare’s mission statement, operations and procedures, staffing and budget. This business plan works to keep you on track and striving toward success. 

Consider how you want your business to be organized for you plan. Will you be solo or hire staff? How will you secure funding? Will you offer services beyond child care (like tutoring)? For help in creating your business plan, check out this detailed guide from the U.S. Small Business Association .

4. Find a Location for Your Daycare

If you plan on running your daycare out of your home, this step should be pretty straightforward. If not, you’ll need to find a location for your child care facility.

Many recreational centers, churches, local businesses and even schools have space available to host a daycare, typically for a monthly fee. Search online, in your local newspaper and within your network to find options in your area. 

Once you’ve found a good fit, you need to check your city’s zoning laws and licensing guidelines to make sure your chosen location is compliant. That way you can avoid some legal headaches down the road. 

Ideally, you’ll need to find a location that’s centrally located, easily accessible and child-friendly. Consider what children and their parents will be looking for in a child care center. You might not find the perfect option, but you can make it work with a little TLC.

5. Get Insurance

Most daycare centers need several types of insurance in order to keep children (and their businesses) protected. These policies typically include liability coverage, property, workers’ compensation and business insurance.

Not sure what type of insurance you need? You can always check with your local child care provider licensing office for guidance.

6. Seek Out Grants and Funding

As we covered already, there are certainly costs associated with starting a daycare. If you don’t have the money you need to cover your initial startup costs, you’ll need to get creative when it comes to acquiring funding.

There are many grants available to help you cover your startup costs. You might also consider taking out an SBA loan or doing community fundraising. Know that the goal is to use these funds as an investment that will yield profitable returns in your business.

Costs Associated with Starting a Daycare

There are several things you’ll need to buy or lease in order to get your business up and running for day one. These expenses include but are not limited to:

• Renting a daycare space
• Indoor and outdoor play equipment
• Art supplies
• Cleaning supplies
• Child care supplies (like diapers and wipes)
• Business laptop
• Licensing fees
• Food (for snacks/meals)
• Bottles, cups, plates, utensils, etc.
• Car or reliable transportation (optional)

You might think of some additional items you’d like to have at your daycare. Over time, you can use the revenue coming in to help cover these expenses and invest in better equipment/supplies. It’s OK to keep things simple and then scale your way up. 

7. Prepare Your Daycare Center

Once you have a location secured and the proper materials and equipment in place, it’s time to prepare your daycare center.

First, clean your facility and sanitize with an effective disinfectant. Then, take the needed steps to childproof your daycare according to the ages of the children you will be caring for. Follow this childproofing checklist for help.

Finally, set up play equipment and lay out toys. You might decide to use storage boxes to keep everything organized. You can always rearrange your layout according to your needs.

Is your daycare ready for service? Give it another once-over and you’re ready to open your doors for day one of business!

8. Draft up a Contract

As a small business owner, having a contract is always a good idea. The parents that come to your facility are essentially your clients, and you want to have a solid contract in place to protect yourself from any legal issues.

We recommend seeking out a trusted contract lawyer to draft up a contract according to your needs and unique business requirements. Your contract will then be used to outline your expectations for your clients and their children.

Here are some important questions to consider when creating your contract:

• How do you expect to be paid?
• How will you handle late payments?
• What time should parents pick up their children?
• Are there consequences for late pick up?
• What services will you provide?
• What is your policy when it comes to sick children?
• Do you offer refunds? If so, under what conditions?
• What happens if a child is injured at your facility?

Whether you seek help from an attorney or write the contract yourself, you should have a contract in place before accepting business. Once signed, you can then send professional daycare invoices to get paid by your clients. 

9. Establish Policies and Procedures

Establish policies and procedures for the families that attend your daycare and your staff. These procedures may include an emergency plan, safety procedures, privacy protocols and rules for your facility.

Having these procedures in place will help you keep the children safe and protect yourself from liability (in some instances). In establishing your policies, be sure to review your local child care licensing requirements to ensure compliance. 

10. Research Possible Tax Credits

If you’re opening an in-home daycare, you may be eligible for certain tax reductions based on the fact that you’re using your residence for business purposes. This means you can essentially write off a portion of your housing cost. This can be the case even if your daycare space serves as a family room after hours. 

11. Hire Staff as Needed

When you’re first getting started, you may just be a company of one, as you might want to save the cost of hiring unnecessary help. But over time, you may need to hire help to take care of the kids during the day.

This is especially true if you find yourself running up against the required ratio of staff to children, as outlined in your local daycare licensing requirements. Be sure to review these to make sure you have enough staff for the number of children you plan on caring for.

Also, make sure all child care staff undergo criminal background checks and provide references to ensure the safety of the children. Make your hiring decisions carefully to keep your facility safe and maintain a stellar reputation.

12. Market Your Daycare

You have your daycare set up and open for business, now how do you get families in the door? As with any small business, you’ll need to market yourself to attract potential clients.

There are many ways to market your daycare. One method is to create flyers and post them around your local community—at businesses, schools and coffee shops. You can also run paid ads on Google or Facebook to draw in families from your local area.

To establish your daycare as a professional business, consider building a website that provides more information about your services. A basic website can cost anywhere from $10 for a WordPress template and set up, to $2,000 or more for a custom design.

With a website, you can then use search engine optimization (SEO) to attract organic traffic from Google. That way, when families search for a daycare near them, your business is likely to show up in the search results.

13. Promote Your Daycare on Social Media

Another effective marketing tool for daycare centers is social media. Platforms like Facebook, Instagram and LinkedIn can be used to promote your business and draw in potential clients.

Create a business Facebook page to post more information about your daycare, collect client testimonials and keep families up-to-date with events at your daycare. You can also post on Instagram and LinkedIn, with targeted hashtags, to attract families in your area.

As your business grows, you might decide to invest in paid marketing services. A digital marketing agency or consultant can help you increase your business’s presence online, outrank your local competitors and attract new clients. 

14. Provide Top-Quality Care

The success of your daycare depends on you providing top-quality care to your families. If the kids at your facility are properly cared for, and, even better, enjoy coming to your daycare, you’re likely to attract more referral business.

Positive reviews can work wonders to attract new clients. Ask families to review your business on Facebook, Google, Yelp and other review sites to improve your daycare’s reputation in your community.

Always look for ways to improve your daycare. Ask families for feedback, invest in additional education and hire fantastic staff to make your daycare the obvious choice for families in your area. 

15. Manage Your Business Finances

Many small businesses fail due to poor money management. If you want your business to succeed, you’ll need at least a basic understanding of business accounting and how to manage your expenses.

Staying on top of your business finances is more than just tracking revenue in and expenses out. You’ll need to plan for taxes—typically around 30% of your revenue, after expenses—and make informed decisions when it comes to how you’re going to allocate your funds.

Professional daycare accounting software can help you send invoices, track revenue, manage expenses and more. It can even send reminders to parents for late payment and accept credit card payments with ease.

The more you know, the easier it will be to make smart financial decisions. Stay on top of your business finances so your business is not only surviving but thriving . 

Congratulations on taking the first step to starting your own daycare business—reading this guide! By now you have a general blueprint for how to start your own business and get up and running. 

Need more help getting started? Check out these reliable resources for aspiring daycare business owners:

• Child Care Aware of America: licensing guidelines for child care and daycare providers
• United States Department of Health and Human Services: childproofing checklist
• Early Childhood Training and Technical Assistance System (ECTTAS): child care resource guide
• Office of Child Care: list of state licensing agencies
• Child Care Resources Inc.: early educator training

Starting a daycare business can be challenging but also incredibly rewarding. The process is made easier by having a general roadmap for how to get started. Hopefully, this guide has provided some guidance on how to get started, plus inspiration for you to finally launch a business of your own.

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500+ business plans and financial models

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

• January 30, 2023

👇 Check all our resources on daycares 👇

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.

Privacy Overview

How to Start a Daycare Business

Emma Castleberry

13 min. read

Updated April 10, 2024

Free Download:  Sample Daycare Business Plan Templates

Do you love caring for children? Does spending your day finger painting, reading Dr. Seuss, and playing ring-around-the-rosie sound like something you’d enjoy doing? Then opening a daycare might be just the thing for you, and this guide can show you how.

To get a sense of how to start a daycare business, we talked with Lindsey Roemen, owner of Lindsey’s Family Daycare in Larchwood, Iowa, and Shalonda Owens, owner of Fruitful Trees Learning Center in Columbus, Ohio, about their experiences as daycare owners.

Lindsey says working from home and being able to stay home with your children are great perks to daycare ownership, but it also takes a special person. “You can’t go into daycare just to stay home with your kids,” she says. “You have to be a kind, patient person.”

• The outlook for daycare businesses

The COVID-19 pandemic temporarily upended the daycare industry. But it has since shown signs of recovery and growth. The U.S. child care market is expected to grow at an annual rate of nearly 6% through 2030, driven by increased demand as more parents return to work.

This means now is an excellent time for opening a daycare. An in-home daycare offers the obvious perks of working from home and spending time with your children, but even if you don’t have any little ones of your own, an in-home daycare can be a fun business for anyone who loves kids. Working parents will always need someone to look after their children, meaning a daycare business will never become obsolete.

• Should you franchise?

You can skip a lot of steps of starting a daycare by purchasing a daycare franchise. But for most people, this option is cost prohibitive: The cheapest franchises start at $59,000 and can cost up to $3 million.

This guide will focus primarily on how to start a daycare center in your own home, which has many benefits: fewer expenses, more flexible hours, and convenience. Read on to learn the ins and outs of how to open a daycare.

• Step 1: Learn about licensing

The first step to starting a daycare is to contact your state Daycare Licensing Agency. “You have to call your state and see what is required of you,” says Lindsey Roemen. “Every state is different and has different guidelines. You have to weigh pros and cons and see if you can make it work in your home.”

Not all states require licenses, but you almost always need to complete a registration, depending on how many children you will be caring for.

So one of your first tasks will be determining what kind of licensing your state requires, and how many children you plan to care for at once. Many states only require licensing if you’re caring for five or more children, so perhaps you’ll choose to avoid the licensing process and keep your enrollment low.

“There are a lot of people who quit daycare or dropped their numbers down because they didn’t want to be registered,” Lindsey says. When you have a better idea of what your state requires, it will help you identify your own business plan.

Another consideration is your Home Owner’s Association, if you belong to one. The enrollment numbers at Shalonda Owens’ daycare, Fruitful Trees Learning Center, were limited by her HOA. “Where I live, my HOA will not allow me to have over six kids at one time,” she says.

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Here are some examples of possible licensing requirements:

• Physical space: a minimum square footage per child, both indoor and outdoor, depending on age.
• Health requirements: annual medical examinations for staff and/or children; immunization records.
• Fire regulations: a posted evacuation plan in each room and regular, documented fire drills.
• Education or training requirements: certifications in Early Childhood Education, on-going professional development for staff. Lindsey was required to have an Early Childhood Education degree or several years of experience in childcare (she qualified with the latter).

Once you have read the licensing requirements carefully, you might want to make an appointment with licensing specialists to ask questions and review the procedure for obtaining your license (if you need one). It might be helpful for them to visit your home, as well.

• Step 2: Identify existing services

Now that you have reviewed the licensing regulations in your state and determined if starting a daycare is a feasible option for you, it’s time to look at other daycares in your area. This will be your competition and colleagues.

Compile a list of daycares in your area with the following information:

• Enrollment numbers (how many children do they care for?)
• Ages of enrollment
• Tuition cost

This information will make it easier for you to decide these things when opening your home daycare.

Ask yourself: Where is the gap between community need and existing services? What needs aren’t being met? If there is a saturation in your area of facilities offering full-time care for two-to-five-year-olds during traditional, weekday hours, then maybe your home daycare could offer very early morning, overnight, weekend, or evening care, or specifically care for infants up to two years old. By identifying the existing daycares in your area, you can determine what your community needs and what will make your business successful.

In addition to knowing the competition, there are other benefits to knowing the other daycare providers in your area. In Larchwood, Iowa, there are six home daycare providers including Lindsey’s, as well as a daycare center. When Lindsey had surgery, all the home providers pitched in to cover for her and take her children while she recovered. “We back up for each other,” Lindsey says. “We get together once every other week and talk about what we’re doing.”

To obtain information about other centers in your area, you can contact your county licensing office, spend some time searching online, or even just browse through the Yellow Pages.

• Step 3: Create a business plan

You have a business idea, and now it’s time to turn that idea into a plan. This requires some specific decision-making and research to nail down the details of your daycare. To help guide your plan, check our daycare business plan example and free template .

1. Work out the logistics

Here are some logistical questions to get you started:

How many children will you care for? Many states have strict rules about the maximum number of children of certain ages allowed in a home daycare. “Start out small,” Lindsey says. “I think it’s important to get yourself used to it. If you start out smaller, you’ll be more successful.”

What is the minimum and maximum age for enrollment at your daycare? At Lindsey’s Family Daycare, the youngest child is eight weeks and the oldest is nine years. “It just seems like parents typically around 10 years old start giving them more responsibility and letting them stay home,” Lindsey says.

What time will you open your doors and what time do children need to be picked up? There are a lot of options around timing, and it’s a good idea to check out your competition before making this decision. Some non-traditional options include after-school care (this also opens up the ages of children you can accommodate to include school-age kids), drop-in or demand care, or part-time care.

Will you provide food or do children need to bring snacks and lunches? If you will provide food, check out the Child and Adult Care Food Program (CACFP),  a food cost reimbursement program available to home daycares.

Will you be hiring more staff? What about an accountant or bookkeeper? Shalonda encourages outsourcing for daycare owners when possible. “You need strong administrative skills,” she says. “I’m the type that I hire my weakness. I have a friend that helps me with newsletters and things like that.”

A lot of these answers will be provided for you by your regulations, but some of them will be entirely up to your personal preference and the limitations of your space.

2. Come up with your name and philosophy

The name of your daycare will become your brand. You may want to include your personal name, as Lindsey did with “Lindsey’s Family Daycare,” or you may want to choose something completely different, like Shalonda Owens’ “Fruitful Trees Learning Center.”

Choosing an educational philosophy might help you create a name for your daycare. There are plenty of philosophies to choose from—Montessori, Waldorf, and Reggio Emilia, to name a few. If you don’t already have experience with these, research online to find out what resonates with you. Lindsey uses a play-based philosophy at Lindsey’s Family Daycare. “I’m structured as far as when we have breakfast, lunch, snack,” she says. “But I’m a strong believer in the free childcare and letting them be themselves through free play.”

Once you have identified a philosophy and name, organize a program: times for meals, outdoor play, and naps, as well as prepared activities and lessons based on your curriculum.

See also: The Complete Guide to Registering Your Business Name

3. Establish a health and safety plan

You will need to have plans for emergency evacuation, sickness prevention, and accident procedures. Many licensing departments require you to do fire and/or tornado drills regularly.

4. Draw up a contract

Create a contract for parents to review and sign when they enroll their child.

This will have information for them about payment, any additional fees for supplies or late pickup, and a sickness and inclement weather policy.

It will also request information from them, such as a child’s allergies or medical conditions, emergency contact numbers, immunization records, and a list of people who can pick them up.

This 211 Childcare website provides guidance on forming a contract and also offers a sample PDF.

5. Create a budget

A major part of any business plan is an organized, well-considered budget . “You have to be able to budget yourself,” Lindsey says. “It can get away from you. You have to be willing to treat it like a job.”

Startup costs

When starting a daycare, it is important to begin with enough money to cover your startup costs and the operational costs for at least the first 90 days. Remember, it is unlikely your daycare will start off with full enrollment, so don’t rely on enrollment fees for children unless they are already registered.

“You need to have a startup budget, but you can start up with the bare minimum,” Lindsey says.

Here are some examples of startup costs when opening a daycare:

• Personnel (including your salary)
• Equipment (educational, kitchen, outdoor, office)
• Supplies (educational, housekeeping, office)
• Advertising (print, online, ad space)
• Licensing fees

6. Set your tuition

Another consideration in your budget is how much you will charge your clients.

One way to get an idea of how much you will charge is by referring to the information you collected on daycares in your area. Your rates will depend largely on your location; in Iowa, Lindsey Roemen charges a flat rate of $25 per child, per day, with a discounted rate of $17 per day for siblings. She and her fellow in-home daycare providers in the area try to keep their rates the same.

Shalonda Owens has a more complicated system for fees at her in-home daycare in Ohio. Her weekly rates are $160 for infants (six weeks to 12 months), $150 for “early toddlers” (13 months to 23 months), $145 for two-year-olds, and $135 for preschoolers (three to five years old). Before and after school care is $7/hour.

Another factor to consider is how and when you will accept payment. You’ll also need to establish a deadline for payment and penalties for late payments. Lindsey’s clients write her a check every Thursday at pickup, and Owen’s clients pay every Monday at drop off. In addition to tuition, many daycares charge a one-time enrollment fee to cover the extra time and paperwork you will need for each new child.

Include anticipated tuition in your projected income for your budget, but don’t rely heavily on it. “You have to be wise in your spending,” says Shalonda. “There are times where your enrollment may decrease and you have to be able to manage things for a long period a time.”

7. Determine where you’ll get your funding

Luckily, for an in-home daycare, it is likely that your startup costs will be low. But should you find yourself needing some startup cash, here are your options:

Private: Ideally, your startup costs can be covered by your own funds or that of a friend or family member. This reduces the time you will spend looking for additional funding and there are no finance charges.

Commercial: Commercial banks offer short-term and long-term business loans at prevailing interest rates.

Government agencies: Contact your Small Business Administration office for information on federal loan programs or your state’s economic development office for information on state loans and grant programs.

Tax credits: There are several home business tax write-offs that can offset your expenses when you are running a daycare from your home. This includes 100 percent deductible expenses like food, toys, and equipment, as well as partially deductible expenses like home insurance and utilities.

• Step 4: Get set up

Now that you have a plan, it’s time to set the wheels in motion.

Choose your location

Picking the location for your daycare may be necessary if you don’t plan to run it out of your home. For more information on picking your business location, check out our article, How to Choose Your Business Location.

Purchase equipment

Purchase any equipment needed for your daycare. In addition to toys, you may need sheets, mats, blankets, child-sized utensils, plates and cups, high chairs, step stools and booster seats.

Purchase insurance

Insurance is vitally important when starting a daycare. You need property insurance to cover your business equipment and liability coverage in case you are sued. For help finding an agent and purchasing insurance, contact your State Insurance Department.

• Step 5: Market your daycare

For both Lindsey Roemen and Shalonda Owens, marketing was never a part of the process of opening a daycare. Word of mouth filled up their enrollment numbers and waitlist so quickly that they never had to market. The same might be true for you, but if not, marketing is an important step for ensuring your home daycare thrives.

Here are some questions that can help you identify your client base and how to reach them:

• Who are your potential clients?
• Where are they?
• What are they currently doing for childcare?
• What can you offer them that is an improvement on their current arrangement?
• How do you compare with your competitors?

You gathered a lot of this information earlier when first formatting your business plan; now, you can use it to help you target your marketing. Put up fliers in your community, create social media pages (Twitter, Facebook, LinkedIn) and be sure to include testimonials from previous clients whose children you have cared for. Recommendations inspire trust in potential clients.

Once your daycare is operational, continue to seek out accreditations like the National Association for the Education of Young Children (NAEYC) or National Association for Family Childcare and other professional development opportunities to improve your knowledge base and your reputation as a child care provider.

Be sure to continue collecting feedback from your clients. Use the positive reactions in your marketing and handle any criticisms swiftly and professionally. With the proper foundation for your home daycare, you are sure to have more positive feedback than negative.

• Child Care Law Center: This nonprofit provides very accessible information about the rights and responsibilities of childcare providers.
• National Association for Family Child Care: A national resource for in-home childcare providers and also a source for accreditation.
• Association for Early Learning Leaders: An excellent source for professional development, accreditation, and the host of an annual, national conference for early childhood educators.
• Child Care Aware: This website is a great place to start when you decide to open a daycare. It helps with both the business and philosophical elements of childcare.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Emma is a freelance writer and media specialist with a passion for crafting in-depth, human interest articles. She likes spending all of her money on travel, eating cheeseburgers and ice cream, and dancing with abandon.

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A Comprehensive Guide to Starting a Childcare Center

• brightwheel
• Running a business

Thinking about starting a childcare center? Maybe you love working with little ones but also have some business savvy? Or perhaps you’ve noticed a shortage of childcare options in your area and think your community could use more services? Whatever your reason, this is a big undertaking, and you’ve got your work cut out for you. But the good news is that if you do your research, develop a clear plan, and stay organized, you’ll be well on your way to achieving your goal of starting a childcare center.

Your success will depend on careful management of the process from start to finish and beyond. Starting a childcare center should prove to be a rewarding and successful venture if you approach the planning, building, and launching phases in a systematic way. If you follow our step-by-step guide to starting a childcare center , you’ll lay the groundwork for growing and maintaining a thriving and respected business.

Phase 1: Pre-launch

Set your program goal.

Before you embark on this adventure, you should be certain it’s right for both you and your community. Do a needs assessment before investing your time and money into starting a childcare center. Consider all your options: Are you planning an in-home program, or will you look for a facility? What age groups will you consider? Will you serve school-aged kids or only preschoolers? Whatever you are considering as your focus, Child Care Aware is a great resource as you start your planning process. They publish guides to each type of childcare business and walk you through the process from the planning level and beyond. You’ll be visiting their website as a resource often throughout this process, so spend some time reviewing all of the helpful materials they offer at this early planning stage.

Learn the rules and regulations

Once you’ve settled on a program direction for your center, you’ll need to take a look at the regulations surrounding your program type. Each state has licensing requirements for childcare facilities, and you’ll want to follow them to the letter. The National Database of Child Care Licensing Regulations has a state-by-state list of licensing requirements as a starting point. You’ll also most likely be governed by your state as a small business owner, too. Check with your local government for all the rules and regulations on starting a childcare center.

Depending on the type and size of your program, you’ll also need several different types of insurance policies, including liability, property, workers’ compensation, and business insurance. Again, both child care and small business licensing requirements will provide guidance.

Develop detailed business plans

Writing a childcare business plan is a big task, but due diligence and hard work invested up front will set you and your center up for success. Your business plan will hash out your organizational structure, staffing, operations, budgets, insurance policies, marketing, and more. This is another research-heavy stage of this process, with a focus on understanding how much money you’ll need to successfully launch a childcare business. Are you using your own money, or are you seeking a small business loan? The U.S. Small Business Association’s website has details on creating each necessary piece of a successful business plan .

Decide on a philosophy and curriculum

Business plans and financial modeling may not be second nature to you, but knowledge of early childhood developmental needs is. This is the fun part, and will likely tap into your real strengths as a childcare professional. Whether you are envisioning a play-based Reggio approach or an outdoor-focused program, you’ll need to document this for your families and your staff. You'll also need to choose a daycare or preschool name that will make a lasting impression on prospective families. Once your guiding philosophy is outlined, you’ll have a framework with which to begin building detailed daily schedules to serve your center.

Phase 2: Launch

Find a location.

Now that you’ve nailed down what you’re hoping to offer and how you’ll accomplish it, your plan will enter the exciting phase of actually making it happen. First things first, you need a location! Will you be remodeling your home to accommodate your center? Or are you looking for a facility to rent? In any case, you’ll need to find your childcare business a home. Start by checking your city’s zoning laws and child care licensing guidelines when you’re making this decision to be absolutely sure your location is compliant.

Prepare your facility

Once you have a location, you’ll need to prepare it. Will you be renovating, or is the facility move-in ready? Does it meet ADA guidelines? What are the fire codes for your facility? Are your appliances up to code for food storage? This is another regulation-heavy phase as you want to ensure you’re starting off on the right foot.  

You’ll also need to think through how best to set up your space for the flow of your day. Where will you store supplies? How should you organize your play centers? What’s the best floor plan for your furniture? These are all things that will evolve over time, but careful thought during this phase will get you as ready as you can be the first day you open your doors.

Create policies and procedures

While you’re working through your vision for the setup of your space, you’ll also be thinking through your day to day logistics and the nuts and bolts of running a childcare center. You’ll need to put policies and procedures in place for both your families and your staff, and gather these into handbooks. Child Care Aware offers a terrific detailed guide to this process. You’ll also develop a disaster or crisis management plan and health, safety, privacy, and nutrition protocols, all under the guidance of your local daycare licensing requirements.

Some sample policies/procedures you’ll need to think through and document:

• What are your agreed upon hours of business?
• Are there consequences for being late for pickup?
• What will you provide, and what will you ask your families be responsible for? (meals, snacks, diapers, etc.)
• What is your policy for sick children?
• Do you offer holiday care? Will you be closed for a spring or summer break?
• How will you handle tuition billing and late payments?

Find the right tools

One thing you’ve figured out if you’ve made it this far in the planning process, is that your administrative tasks as a small business owner may be daunting. You’ve got finances to manage, staff to pay, supplies to purchase, and endless licensing requirements to track, from daily attendance to incident reports to immunization records.

The good news is that technology is your friend. Brightwheel is an easy-to-use software platform that will help you manage your business and stay in touch with families. You will use brightwheel for recording and tracking daily events and activities, and parents get real-time updates delivered to their mobile device throughout the day. This powerful platform also offers digital attendance taking, reporting, messaging, and an automated paperless billing system. Use this software to streamline your administrative tasks and you’ll have more time to focus on providing top-notch child care to your families--which is your whole goal anyway, right?

A childcare center is only as good as its staff, so mak e your hiring decisions ca refully. Verify the licensing requirements for staff to child ratios and teachers’ educational backgrounds and training certifications. Staff may be subject to c riminal background checks and f ingerprinting, and be sure to rigorously verify references and education levels.

Once you have staff in place, you’ll need to plan daily staffing schedules to maintain ratios throughout the day and provide necessary breaks. You’ll also maintain records of staff certifications and required trainings such as CPR and first aid. As a high-quality childcare business, you’ll also want to offer some ongoing professional development opportunities to keep your employees up to date on best practices and industry expertise.

Fill your roster

During your pre-launch phase, you’ll start to think about accepting enrollment applications, and would be wise to do so as soon as your program direction is mostly set and your business plan is solid. Along the way, you’ll then need to get the word out in as many ways as possible to fill your center.

List your center in any local directories of childcare businesses and participate in childcare or preschool enrollment fairs in your area. Advertise through local businesses, parent groups, local events, popular blogs, and online communities. Try sites like Parenthoods , Red Tricycle , NextDoor and Winnie . Run a social media campaign focusing on your target population, or host a grand opening event to attract families. Get the word out! Personal referrals are generally the key to a successful childcare business, so you’ll need to start building and nurturing these relationships from the beginning.

Phase 3: Post-Launch

Always be marketing.

Once you’ve managed to fill your inaugural child roster, continue with ongoing marketing efforts  so that you’ll always have a healthy waiting list. Having a sharp-looking website is a must these days, as it is how you will make a first impression on potential customers. Give searching parents as much information as possible about your program by maintaining an up-to-date, professional-looking site that offers everything they would be interested in when on the hunt for child care. Photos of your center, staff, and activities are crucial to include. The more details you can share the better, as choosing child care is one of the toughest decisions parents make.

Build a reputation

Word of mouth is priceless, especially in the childcare business. Keep your current families happy, and they will sing your praises when they run into other families at the playground or the grocery store. Encourage happy customers to share testimonials, posts, and reviews to all of your social media accounts. Consider giving current families a discount for any referrals they send your way.

Following these strategies should ensure that you get started on the right foot, and that you always have a full house and a long waiting list.  Building your own business from the ground up should prove to be a rewarding experience, especially if you invest the time to carefully and systematically plan and launch your center.  

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How to start a daycare in 2021.

The year is 2021 and there’s never been a better time to start a daycare business in your community. 

During the past year, the COVID-19 pandemic caused thousands of child care centers to close their doors – some permanently. This created a child care accessibility crisis that resulted in hundreds of thousands of workers – mostly women – leaving their careers to raise kids at home.

But with vaccines now being distributed across the country and new cases on the decline, we expect the child care industry to make a strong recovery in 2021. And with affordable child care in short supply, we expect anyone opening a daycare this year to find plenty of demand for child care services in their community.

That’s why we’re so excited to share this guide on how you can start a daycare business in 2021. We’ll explain step-by-step how to plan, launch and market a child care business in your community.

Let’s get started!

Prepare Yourself For Success

The more time you invest in educating yourself and developing new skills, the better prepared you’ll be to succeed running your own daycare. While you usually won’t need any special education to open your daycare business, you might consider taking courses in early childhood development, business administration, business marketing or even child psychology.

The more you learn, the better you’ll be able to plan lessons that help kids reach their full potential.

Create a Daycare Business Plan

Once you’ve decided that it’s time to start a child care business, the first thing you’ll want to do is create a business plan. 

A business plan is a written document that explains the goals of your business and how you plan to achieve them while turning a profit. 

Here’s what to include:

• Create a mission statement for your child care.
• Outline your child care philosophy and values.
• Decide what kind of child care to open – will you operate in a center, or in your family home?
• Research other child care businesses in your community – what can you learn from them? What will you do differently?
• Create a budget for launching your daycare operation.
• Decide what services you will offer and how much you plan to charge.
• Create a plan to market your business in the community.
• Set financial goals for your business.

Creating a daycare business plan helps you establish a vision for how your business will earn money by providing services to your community. It also allows you to clarify details about your business, including where you will operate, what services you will provide and how much you will charge.

Research Grants, Loans and Tax Credits

Starting a daycare business can cost as little as $500 or as much as $50,000, depending on the location you choose and the specifics of your business plan.

Don’t have cash in hand? No problem – there are other ways of obtaining funding to get your business off the ground.

Start by researching small business grants and tax credits, both from your state and from the Federal government. You can also look into a small business loan to help you launch your business. 

Find a Great Location for Your Daycare

Location plays a major role in the success of your child care operation.

You’ll want to pick a location that’s easy for families in your community to access. Setting up your child care in a neighborhood with schools, or near a big employment center, is a great way to make your child care services more convenient for parents. 

You can also check out this digital map of American child care deserts , which could help you identify an underserved community with high demand for child care services.

Once you’ve chosen a location, you’ll need to consult with your local and state zoning offices to find out whether the location you want is properly zoned for a child care center.

Read Child Care Rules and Regulations

Once you’ve settled on a location, it’s time to get familiar with the child care rules and regulations that apply in your area.

As a daycare operator, you’ll need to fully understand and comply with the child care rules and regulations in your state to obtain your child care license and remain in good standing with your state regulatory agency. 

You’ll learn about things like:

• Staff-to-child ratios and group size requirements
• State learning and curriculum guidelines
• Required health and safety training for child care providers in your state
• Recordkeeping requirements for daycares

Apply for a Child Care License

Child care licensing requirements vary from state to state – but you’ll generally need a child care license before you can legally operate a daycare.

To apply for a license, you’ll need to contact the regulatory agency in your state that administers the child care licensing process. In most cases, you’ll get connected with a case worker who will help you navigate the application process and achieve compliance with local child care laws.

You’ll also need to complete background checks, obtain a health evaluation and complete required training for child care providers as part of the application process.

Get Insurance for Your Daycare Operation

Whether you’re opening for home-based or center-based care, you need insurance to protect your child care business from the unexpected. Several types of coverage are available for daycares, including (but not limited to):

• Property – coverage for your building, equipment, electronics and other property
• Crime – provides coverage in case your business is the victim of a crime (theft, fraud, etc.)
• Liability – protects your business from lawsuits for physical injuries, property damage and other types of liability

Purchase Furniture, Equipment and Supplies

Once you’re adequately insured, it’s time to purchase the furniture, equipment and supplies you’ll need for your child care space. 

Be sure to create a detailed floor plan for your child care space so you can purchase exactly what you need and avoid wasting money. Remember to budget for:

• Tables and chairs
• Activity stations
• Toys and books
• Wall covering and decorations
• Colorful posters and window decals
• Art supplies
• Cleaning supplies
• Kitchenware
• Outdoor play equipment
• Child care supplies (cots, diapers, sanitary wipes, paper products, etc.)
• Cubbies and storage space

Prepare Your Daycare Business for Opening

Setting up your daycare space might be the most exciting part of opening a new center. 

There’s nothing like the excitement of seeing your floor plan come to life as you move in your furniture, set up play areas and decorate your space to make it engaging and stimulating for kids. By the time you’re finished, you’ll be able to look around and imagine kids learning, playing and growing up at your child care center.

When you’re done setting up play equipment and toys, it’s super-important to childproof your space. Check out the room for hazards and take steps to minimize or mitigate any injury risks you can identify.

Hire Amazing Child Care Providers

Depending on how many kids you plan to provide care for, you may need to hire additional child care providers for your daycare business.  

Amazing child care providers often come with a strong educational background in child development, as well as some practical experience working with kids. They’re also caring, enthusiastic, organized and great at maintaining relationships with both kids and parents.

Some of the best ways to recruit child care providers for your daycare include:

• Online job boards
• Asking local colleges with ECE programs to refer their recent graduates
• Asking for referrals from parents
• Asking for referrals in your personal network

Establish Standard Operating Procedures for Your Daycare

Standard operating procedures (SOPs) are the policies that your daycare follows when interacting with customers, and the policies targeted toward parents who patronize your business. 

They can include policies for enrolling new families, policies for communicating with parents in case of an emergency, policies for protecting sensitive data and a lot more. SOPs should be written and followed to protect your business from liability, set clear expectations for parents and ensure that your employees provide consistent, high-quality care and service.

Employees at your daycare (including yourself) should be trained to follow standard operating procedures at all times while they’re at work.

Market Your Daycare in the Community

Now that your daycare operation is ready to launch, you’ll need to market your services in the community to start bringing in customers.

Here’s how to get started:

• Get in touch with schools near your daycare and ask them to refer parents in your neighborhood who are looking for child care services.
• Add your daycare to Google My Business and you’ll start appearing in local search results and on Google Maps, making your business more visible to families in your area.
• Create a Facebook page for your business and ask friends to share it with families in your community who may be looking for child care services.
• Set up a simple website for your child care center. Make sure to include pictures, highlight what makes your center different, and make it easy for parents to contact you.
• You can find more great marketing tips here . 

Open Your Child Care Business

Once you’ve done some initial marketing, it’s time to officially open your daycare!

You may want to put up special decorations to commemorate your opening day and get parents and kids excited to be a part of your business.

From here on, you’ll need to focus on providing wonderful child care experiences, building positive relationships with parents, strengthening your child care community and following the child care laws in your state. 

Start Your Daycare in 2021 with Procare Solutions

Procare provides trustworthy and convenient child care software that can help you manage every part of your daycare business.

Our software helps you keep track of attendance and monitor staff-to-child ratios so you can easily comply with state standards. You’ll also be able to automate the child care billing process, digitize child information records for easy access, and engage parents with pictures, videos, daily activity reports and calendar updates.

And with our live customer support, we’re always there to help when you need us.

Ready to start your daycare business in 2021 with Procare Solutions?

Request a Demo

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Procare provides comprehensive child care management software with the power to help you take control at every point of your business.

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Full guide to starting your own in-home daycare.

If you’re interested in starting your own in-home daycare business, this is the guide for you. We’ve created a step-by-step roadmap to help you.

12 Common Pitfalls to Avoid when Opening a Daycare

We focus on some of the pitfalls that you should avoid when opening a daycare business.

The Procare Guide to Opening a Church Daycare

Opening a daycare inside your church is a big commitment, both in time and financial investment. Here are some things for you to consider.

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Starting a christian day care.

As with any day care or child care facility, you have to be licensed in order to open up and be a legally operating facility. License requirements may vary from state to state. However, most will involve health inspections and fire/safety inspections. There are also specific requirements per state as to what you must do to maintain your license. Those should also be considered before you open up.

For example, if you plan to open up a daycare center for kids between three and four years old in California, you will need to have one adult per 12 children. When they the child turns five, that ratio increases to 14 children per adult.

Business Plan

Every business should have a working business plan in order to be successful. Christian day cares are no exception. Daycare centers don’t start off cheap, so you may have to convince a potential lender of what you expect to do. Your business plan should outline the mission of your daycare, the amount of money you plan to spend on start-up, the revenues you expect to gain, and the overall structure of your service. It should also include your target market group. If you plan to run an education-based Christian daycare, for example, that should be noted in your plan. The Bplans website offers a model of what a child daycare business plan should look like.

Align With a Church

Once you have a business plan developed, you should align yourself with a church and present it to them. A church might see your daycare as a way to connect their Christian congregation with a Christian-based service. Churches might even have space available for you to rent. This also can help you reach your target market group. Furthermore, if your church provides community services to the needy and disadvantaged, they could be the centerpiece for receiving federal grants through the faith-based community initiative.

Lenders, Grants and Fundraising

If your Christian daycare meets the right structure, you may actually qualify for a government small business loan or grant. The Department of Health and Human Services has information on faith-based community services that qualify for federal money to help run a childcare. One example is the Child Care and Development Fund, which funds child care vouchers through faith-based organizations that are helping the needy. These vouchers can be used at your daycare to help pay for overall costs.

The nature of your Christian daycare can also help you get grants. If you plan to do early childhood education, your daycare could qualify for Head Start funding. If your meal plan includes dietary guidelines based on USDA recommendations, you could get reimbursements from the USDA.

Align yourself with any community child welfare advisory boards as well as local schools. If you are a participant in the faith-based voucher program, make sure these entities know about it. It can drive up business for you since needy parents are receiving federal aid to help pay for child care.

Additional Fundraising

Whether you accept state vouchers or not, you might have to do some additional fundraising to make up for any necessary costs that could incur at the start of your daycare. Again, aligning with churches can help you raise the necessary money. If you create a non-profit organization to help your day care and follow their guidelines, any monies donated to it can be put towards your start-up costs.

Related Articles

How to start a child care referral agency →.

How to Form a Community Development Corporation →

Starting a Preschool Business →

How to start your own daycare center in pennsylvania →.

Grants to Start a Childcare Business →

How to Open a Church Daycare & Preschool →

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Paul Bright has been writing online since 2006, specializing in topics related to military employment and mental health. He works for a mental health non-profit in Northern California. Bright holds a Bachelor of Science in psychology from the University of North Carolina-Pembroke and a Master of Arts in psychology-marriage and family therapy from Brandman University.

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Daycare Business Plan

Starting a daycare business is an exciting and fulfilling venture, but securing funding can be a real challenge. However, with a well-crafted and compelling daycare business plan, you can increase your chances of attracting investors and turning your daycare dreams into a reality. In this article, we will guide you through the process of creating a comprehensive, informative, and actionable business plan that will catch the attention of potential investors. So, let’s dive in and learn what investors really want to see in a daycare business plan .

Executive Summary: Grabbing the Investor’s Attention

The executive summary is the first impression potential investors will have of your daycare business plan, so it’s crucial to make it count. This section provides a concise overview of your entire plan and should highlight the key points that make your daycare stand out. Begin with a powerful mission statement that captures the essence of your business and reflects your passion for providing high-quality care. Then, dive into the main components of your plan, such as the market analysis, unique selling proposition, financial projections, and funding needs. 

Focus on presenting these elements in a clear and compelling manner, emphasizing the potential for profitability and growth. By crafting an impactful executive summary, you’ll grab investors’ attention and make them want to learn more.

Market Analysis: Demonstrating Market Potential

Investors want to see that your daycare business is built on a strong foundation with high market potential. This means conducting thorough market research to truly understand your target audience and the competitive landscape. 

Start by identifying your ideal customer base and their needs and preferences. Are you targeting working parents with busy schedules, or are you catering to families in a specific neighborhood? Determining this information will help you tailor your services and marketing messages effectively. 

Additionally, perform a comprehensive analysis of your competition. Identify their strengths and weaknesses, and find ways to differentiate yourself from them. Highlight any untapped segments of the market that your daycare can target or any unique features you offer that set you apart. By backing up your claims with data and statistics, you’ll provide investors with a well-rounded understanding of the market potential for your daycare business.

Unique Selling Proposition: Setting Your Day Care Business Apart

To attract investors, it’s crucial to clearly define your daycare’s unique selling proposition (USP). Your USP is what sets your daycare apart from the competition and makes it an attractive investment opportunity. 

Start by identifying the key features and benefits that make your daycare special. Is it a focus on early childhood education, an emphasis on enriching activities, or a commitment to inclusiveness? Whatever it is, make sure to articulate it clearly in your business plan. Consider the pain points common among parents looking for daycare services and explain how your daycare addresses and solves them. For instance, you could differentiate your daycare by offering extended hours to accommodate working parents or by providing a nurturing environment that supports children with special needs. 

By effectively communicating your unique value proposition, you’ll show investors that your daycare is positioned for success in a crowded market.

Operational Plan: Painting a Clear Picture of Business Operations

Investors want to see that you have a detailed and well-thought-out operational plan in place. This section of your daycare business plan should provide a clear picture of how you will run your center on a day-to-day basis. Outline the key aspects of operating your daycare, such as staffing requirements, training programs, and qualifications. Detail the organizational structure, including the roles and responsibilities of key personnel. Mention any licenses, certifications, or permits needed to operate legally and comply with health and safety regulations. 

Investors want to know that you’ve considered and addressed all the necessary operational aspects to ensure a smooth and successful daycare operation. By demonstrating your expertise and attention to detail, you’ll instill confidence in investors that your daycare is not just an idea but a well-planned and organized business venture.

Marketing and Sales Strategy: Attracting Families to Your Day Care

Crafting an effective marketing and sales strategy is vital to attracting families and generating revenue for your daycare. 

Start by clearly defining your target audience: are you catering to working parents, single parents, or parents in a specific geographic area? Once you have identified your target market, develop a comprehensive marketing plan that outlines the strategies you will use to reach and engage with them. This may include a mix of online and offline tactics such as social media advertising, targeted email campaigns, community events, and partnerships with local businesses. Consider offering incentives or referral programs to encourage parent recommendations and word-of-mouth marketing. 

Additionally, outline your pricing strategy and revenue projections to show investors that you have a solid plan for generating income. By presenting a well-thought-out marketing and sales strategy, you’ll demonstrate to investors that you have a clear plan to attract families and ensure the financial success of your daycare.

Financial Projections: Demonstrating Profitability and Growth Potential

Investors are interested in the financial viability and growth potential of your daycare business, so it’s crucial to provide realistic and well-supported financial projections. 

Start by preparing revenue, expense, and cash flow forecasts based on historical data, market research, and industry benchmarks. This will show investors that you’ve done your homework and have a solid understanding of the financial aspects of running a daycare. Highlight key financial indicators such as the break-even point and profitability timeline to give investors a clear idea of when they can expect a return on their investment. Include details about pricing, anticipated occupancy rates, and any factors that may impact your financial projections, such as seasonality or market trends. 

By presenting a comprehensive and realistic financial plan, you’ll provide investors with the confidence they need to invest in your daycare business.

Funding Needs and Use of Funds: Articulating Your Financial Requirements

Clearly articulating your financial needs and how you will utilize the funds is essential to attracting investors. Identify the amount of funding required to launch and sustain your daycare business, and provide a breakdown of how the funds will be allocated. This may include expenses such as facility setup, equipment purchases, marketing efforts, staff salaries, and operating costs. Explain how each component will contribute to the growth and success of your daycare. 

It’s important to be transparent and provide a detailed and realistic plan that shows investors how their investment will be utilized and the potential return it can generate. By explicitly conveying your financial requirements and having a well-defined plan for fund utilization, you’ll instill confidence in investors and increase the likelihood of securing the funding you need.

Crafting a persuasive daycare business plan may seem like a daunting task, but by following the steps outlined in this article, you will be well on your way to creating a comprehensive and compelling plan that attracts investor funding. Remember to focus on showcasing market potential, clearly articulating your unique selling proposition, providing a detailed operational plan, outlining an effective marketing and sales strategy, and presenting realistic financial projections. By combining these elements, you’ll demonstrate to investors that your daycare business has what it takes to succeed and grow. So, get ready to bring your daycare dreams to life, and show the world the incredible value your daycare can offer. The funding you need may be just around the corner!

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Starting a Childcare Center in Illinois

Table of Contents

What resources are available to help me get started?

What funding resources are available, what are the licensing standards and professional requirements for a childcare center, where can i find curriculum resources, what resources are available related to quality and improvement for a childcare center, what do i need to know to work well with parents, iel resources, web resources.

Starting a childcare center offers an opportunity to positively impact the lives of young children and their families in your community. Before you start caring for young children, there are many things to consider.

• The Illinois Network of Child Care Resource & Referral Agencies  (INCCRRA) is an organization of regional  Child Care Resource and Referral  (CCR&R) agencies throughout the state. INCCRRA can also provide you with information about the rates charged by providers in your community and link you with training opportunities and other resources. Once you have established your childcare center, your local CCR&R will let families know about your services.
• Child Care Aware  is a website containing resources for families and childcare providers. The resources are available by state.  Child Care Aware: Opening and Running a Child Care Center  contains information to help you learn about what might be involved in starting a new childcare program. You can also contact Child Care Aware by phone at (800) 424-2246.
• Illinois Early Learning   is a source of evidence-based, reliable information on early care and education for parents, caregivers, and teachers of young children in Illinois. In addition to “Questions and Answers,” such as this one, the website offers printable tip sheets for caregivers and parents, blogs, podcasts, resource lists, tool kits, a monthly online newsletter, and a variety of other useful content. 
• The National Association for the Education of Young Children  (NAEYC) is the nation’s largest organization of early childhood professionals and others dedicated to improving the quality of early childhood programs for children. NAEYC offers many resources through its website and has an accreditation program to recognize high-quality center-based programs.

Occasionally, the Illinois Department of Human Services (IDHS) or other state organizations will offer  grants or loans  for start-up or enhancement purposes to people wanting to become a licensed childcare provider.

• Gateways to Opportunity administers  two programs to support childcare professionals : Great Start, a wage supplement program, and the Gateways Scholarship program to support professionals who wish to further their career in early care and education.
• Quality improvement funds  are available through the local Child Care Resource & Referral (CCR&R) agency. The QI funds are to assist and support programs that are choosing to work toward or maintain an Excelerate Illinois Circle of Quality.
• The IDHS conducts a biennial  Market Rate Survey of Licensed Child Care Programs in Illinois . This resource provides information on the market rates that providers are charging families for childcare. The most recently  published survey is for 2021 . 

Childcare centers in Illinois must be licensed by the  Illinois Department of Children and Family Services  (DCFS). The DCFS website provides links to licensing and additional helpful information for childcare providers in both English and Spanish.

• Local DCFS field offices  can help guide those planning a childcare center through the process in addition to providing licensing information.
• The  licensing standards  for childcare centers in Illinois include information on licenses and permits, administration, staffing, program requirements, structure and safety, health and hygiene, and facilities and equipment.

The Gateways to Opportunity  website explains the many career options and Gateways credentials available in early care and education in Illinois. The  Gateways’ Career Lattice  provides information on the specific training and education needed to take advantage of the many early care and education career opportunities.

• For those providers who need help in establishing professional goals, need financial support to pay for additional education, or need information to find training and coursework to qualify for a particular position,  Professional Development Advisors  are available throughout the state at no cost.

The ExceleRate Illinois website contains a list of curricula that are reviewed and aligned to the  Illinois Early Learning Guidelines for Children Birth to Age Three Years  (IELG) and the  Illinois Early Learning and Development Standards (IELDS) for preschool children.

• ExceleRate Illinois  is the Quality Rating and Improvement (QRIS) system for Illinois. This QRIS system gives childcare, Head Start, and school-based preschool educators and leaders a process for pursuing quality efforts for young children. ExceleRate Illinois also provides standards, guidelines, and resources to help early care and education providers make decisions that lead to higher quality care and better outcomes for children.
• National Association for the Education of Young Children (NAEYC) accreditation  offers childcare leaders a four-step process that involves self-reflection and quality improvement to meet and maintain early learning program accreditation over a five-year period. Directors, teachers, and families all participate in the process.
• In their page on  family engagement , the Head Start Early Childhood Learning & Knowledge Center (ECLKC) examines ways early care and education providers can positively engage with families. The website includes information about supporting fathers, relating to culturally diverse families, and promoting community engagement.
• The Illinois Early Learning (IEL) Project offers  tip sheets  that providers of early care and education can share with parents.
• Zero to Three’s professional resource for childcare providers on  How to Communicate With Parents  is an easy-to-read article with many common examples of childcare providers interacting with families of infants and toddlers in their care.
• Illinois Early Learning Guidelines for Children Birth to Age Three Years (IELG)  
• 2013 Illinois Early Learning and Development Standards
• Illinois Early Learning

This is a visual representation of six credential levels ranging from noncredit community-based training through completion of a graduate degree. Each credential level combines education, work and practical experience, and professional contributions in the field of early care and education. By advancing on the career lattice, practitioners can potentially open up additional career opportunities for themselves.

Child Care Aware of America works with a national network of more than 400 child care resource and referral (CCR&Rs) agencies and other partners to ensure that all families have access to quality, affordable child care.

Quality Improvement (QI) Funds are available through the local Child Care Resource & Referral (CCR&R) agency. The QI Funds have been developed and are offered to assist and support programs that are choosing to work towards or maintain an ExceleRate™ IL Circle of Quality. The QI Funds are awarded based on available funding. Funds are provided by the Illinois Department of Human Services.

NAEYC Accreditation of Early Learning Programs’ accreditation system provides a mechanism for early learning programs to demonstrate their commitment to high-quality early childhood education. The stages in the accreditation process are intentionally designed to celebrate programs for where they are; and provide the path they need to meet more rigorous and comprehensive standards.

This is a statewide quality rating and improvement system designed to make continuous quality improvement an everyday priority among early learning and development providers. The program establishes standards for helping infants, toddlers, and preschool -age children develop intellectually, physically, socially, and emotionally. It provides a framework for early learning and development professionals to identify opportunities for improvement, increase their skills, and take steps to make positive changes. ExceleRate Illinois is administered through the Illinois Network of Child Care Resource and Referral Agencies (INCCRRA) under the joint direction of the Governor’s Office of Early Childhood Development, the Illinois Department of Human Services, and the Illinois State Board of Education.

This Head Start resource on family engagement offers strategies on how to support and engage families, how to use social media to engage families, how to boost school readiness through family engagement, and more.

This website highlights two programs, Great Start, a wage supplement program, and the Gateways Scholarship Program, that Gateways to Opportunities administers to support child care professionals.

Child care resource and referral services are available in all Illinois communities through a local Child Care Resource & Referral (CCR&R) agency. Each CCR&R represents a grouping of counties in the state, referred to as a service delivery area (SDA). 

Gateways Credentials are symbols of professional achievement that show knowledge, skills and experience in caring and educating for children. Credentials are awarded and recognized by the Illinois Department of Human Services (IDHS) Bureau of Child Care and Development.

Occasionally, DHS or other state organizations will offer grants or loans for start-up or enhancement purposes to persons wanting to become a licensed child care provider. The following office may advise of available grants or loans.

This short article discusses three key steps to take after discussing difficult topics with parents.

This website is a resource for anyone interested in licensed childcare in Illinois—parents, providers, and the public. Find out about a licensed childcare facility’s history, and learn about licensing standards, how to become a provider, where to find help with your childcare expenses, and how to make a complaint.

The Illinois Network of Child Care Resource and Referral Agencies (INCCRRA) is a statewide organization which is a resource for making high quality, affordable early care and education and school-age care options available for children and families in Illinois.

This resource provides information on the market rates that providers are charging families for childcare.

The National Association for the Education of Young Children (NAEYC) is a professional membership organization that works to promote high-quality early learning for all young children, birth through age 8, by connecting early childhood practice, policy, and research. NAEYC advances a diverse, dynamic early childhood profession and supports all who care for, educate, and work on behalf of young children. The association comprises nearly 60,000 individual members of the early childhood community and 52 Affiliates, all committed to delivering on the promise of high-quality early learning. Together, they work to achieve a collective vision: that all young children thrive and learn in a society dedicated to ensuring they reach their full potential.

These web pages will help current and future child care providers learn about the steps needed to take to be successful and will provide resources to ensure the early childhood program is providing a high-quality learning experience for young children.

This document describes licensing standards for day care centers.

A Professional Development Advisor (PDA) is an experienced Illinois professional who will assist individuals with planning and achieving career goals in early childhood. A PDA will guide individuals through developing a Professional Development Plan, share information about colleges and universities in their area that offer coursework in early childhood, as well as help them decide which credential or certification would be best for them.

This website provides the city, location, and phone numbers of local DCFS field offices.

This link provides specific resources associated with each standard for center/school based programs.

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• Infants and Toddlers (Birth To Age 3)
• Preschoolers (Age 3 Through Age 5)
• Accreditation
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