How to Write the Perfect Daycare Business Plan

how to write a daycare business plan

If you're planning on opening a daycare, one of the first things you'll need is a comprehensive business plan. Whether you’re a child care professional with a vision or a parent who sees a need, you’ve got your work cut out for you. In this article, we're going to cover the six key elements of a successful daycare business plan.

Writing a business plan for a daycare is a big task, but due diligence and hard work at this stage will give an advantage to the rest of the process. You’ll need to do in-depth research focusing on understanding matters that you’ll need to launch and run a daycare business successfully.

Before you get started, find out about daycare licensing guidelines in your area. Your local government has rules and regulations to govern you as a small business owner and childcare provider, and you want to comply strictly with both. Start by checking out Child Care Aware of America’s Licensing Guidelines for Child Care and Daycare Providers, and search for your state and city. If you’re in California, the Child Care Resource and Renewal Network should have all the necessary information.

Writing a daycare center business plan

Once you’re clear on licensing guidelines, you’re ready to jumpstart your daycare center business plan. Here are the key sections you can include in your business plan:

1. Business Description 

2. Business Assessment

3. Financial Budgets

4. Insurance Policies

5. Operating Policies and Procedures

6. Daycare Marketing Plan


Business Description

Let’s start with the basics. What are you planning to do with your new daycare business? Identifying the child care services you’re offering will help you shape a clear plan for your daycare business. Write some goals or even a mission statement. Craft an outline of the purpose of your daycare or childcare center.

Business Needs Assessment

Start by looking at general child care industry trends, then narrow it down by looking at your local area's child care offerings and choices. You’ll need to figure out who your target customers are and confirm that there is a need for another daycare in your community. Are there a lot of young families in your neighborhood? Is there a particular age group that needs child care? Would your daycare business be located somewhere convenient for commuting parents? Don't forget to check out the competition. Research the existing daycare options in your community. How will you make your daycare center a cut above the rest?

Financial Budgets

Developing a detailed financial budget for your daycare will guide you in the logistics of running your own business. You’ll need to determine the expected cash flows vs. expenditures, then build a plan for unexpected costs. How many children do you need to serve to be able to cover the finances in your business and make it stay afloat? Child Care Aware offers some great resources for child care providers to help you through this process.

Insurance Policies

Depending on the type and size of your daycare center, you’ll need insurance policies of several different types, including liability, property, workers’ compensation, and business insurance. Check the licensing requirements for guidance.

Operating Policies & Procedures

Write out policies, procedures, and handbooks for your staff and families. Verify the daycare licensing requirements for staff ratio and teachers’ educational backgrounds. Child care staff are subject to criminal background checks and fingerprinting. Make sure to verify references and education levels rigorously. You might also want to develop a disaster or crisis management plan and health, safety, privacy, and nutrition protocols, all under the guidance of your local licensing requirements.

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Daycare Marketing Plan

A smart marketing plan is the key to attracting customers.

  1. 1. Executive Summary

  2. An executive summary is an overview of the key points of your marketing plan. It briefly describes your daycare's mission statement, services, staff, and location. Although the executive summary is the first section of your daycare's marketing plan, it should be written last because it provides the gist of information in each section of the entire plan.


    2. Company Overview

  1. Your company overview should explain your daycare's mission, values, services, and business structure. What is your mission statement? What services will you provide? Will your daycare be a limited liability company (LLC), corporation, sole proprietorship, or partnership? Will it be in a home or a commercial space?

  2. Your company overview should also include information about your competitors. Do any other daycares in the area provide similar services? Are there already enough daycares in the area to serve the entire community? If so, what sets your daycare apart and makes it the best choice?

  1. 3. Marketing Strategy

  2. Before developing the advertising for your daycare, determine the types of customers that your daycare will attract. What is their income level (low-income, high-income, or both)? What are they currently using for child care? Create profiles for your primary and secondary target markets to guide your marketing strategy. Your primary target market is the audience that best represents the people you would like to attract with your advertising and convert them into customers. Your marketing should appeal to the demographics (age, location, family size, income level) and psychographics (lifestyle, motivations, priorities) of parents within your primary target market.

  4. Your secondary target market is an audience that does not meet the criteria of your primary target but may still make up a portion of your daycare's revenue. Parents within your secondary target market may be younger, have fewer children, or have a lower income than your primary target.

  5. After deciding how you will target your audiences, consider how to differentiate yourself from the other child care businesses in your area. Going high-tech is a surefire way to please families with young children. Brightwheel is an easy-to-use daycare software platform that will help you manage your daycare and stay in touch with families.

  7. You can use brightwheel to record and track daily events and activities, and parents get real-time updates delivered to their mobile devices throughout the day. It also offers secure, digital check-in/check-out, and a paperless billing system. This is a great way to keep your families looped in on daily activities.

  8. Decide what type of advertising will put you in front of potential customers. Get your daycare listed in any local directories of child care providers, and participate in parenting events in your area, such as maternity and baby fairs or kid-friendly community events.

  10. Run a social media campaign that focuses on your target population. You may need to target your primary and secondary markets differently. For instance, parents in your primary and secondary target markets may fall within different age ranges and may be reached on various social media platforms.

  1. 4. Financial Plan

  2. Your daycare's financial plan should explain your startup budget, funding sources, and income sources such as monthly fees and tuition. Your financial plan should also include a two-year plan that gives you and your lenders an idea of where your daycare will be financially in 2 years.

  1. 5. Management

  2. Your daycare's business plan should include each staff member's duties and qualifications, an organizational chart for your company, and your future hiring plans.

  4. These are just the basics to get you started. Our template will help you to craft a business plan for your daycare. For additional help, the U.S. Small Business Association provides detailed guidance on how to write the perfect business plan.


    At brightwheel, we’re proud to support early education professionals and their important work. Thank you for everything you do for our youngest learners! 


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