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 inform the rest of the process. You’ll need to do your research, with a focus on gaining a deep understanding of what you’ll need to successfully launch and run a daycare business.

Before you get started, find out about daycare licensing guidelines in your area. Your local government will have rules and regulations that will govern you as a small business owner and as a childcare provider, and you want to strictly comply with both. Start by checking out Child Care Aware of America’s licensing guidelines for child care and daycare providers, and then research your specific state and city. If you’re in California, the Child Care Resource and Renewal Network should have all the info you need.

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

Business Description

Start with the basics--what are you planning to do with you new daycare business? The exercise of detailing out exactly what child care services you’re offering will help you shape a clear plan for your daycare business. You might want to write some goals or even a mission statement, outlining your daycare or child care center's purpose and motivation.

Business Needs Assessment

Start by looking at general child care industry trends, but then narrow it down to looking at the child care offerings and choices in your local area. You’ll need to figure out who your target customers are, and confirm that there really 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 has a need for child care? Would your daycare business be located somewhere convenient for commuting parents? And don't forget to check out the competition. Research the existing daycare options in your community. How will you differentiate yourself to attract students?

Financial Budgets

Developing detailed financial budgets for your daycare will guide you in the logistics of running your own business. You’ll need to figure out expected cash flows vs. expenditures and build in a plan for unexpected costs. How many children do you need to serve to be able to pay your bills and stay afloat? Child Care Aware offers some terrific 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 and procedures and handbooks for your staff and families. Verify the daycare licensing requirements for staff ratios and teachers’ educational backgrounds. Child care staff are subject to criminal background checks and fingerprinting, and be sure to rigorously verify references and education levels. You’ll 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.

Daycare Marketing Plan

A smart marketing plan is the key to attracting customers. Decide what type of advertising will put you in front of potential customers. List your daycare 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. Run a social media campaign focusing on your target population.

Another important piece of daycare marketing will be to consider how to differentiate yourself from other child care businesses. These days 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. You can use brightwheel for recording and tracking daily events and activities, and parents get real-time updates delivered to their mobile device 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.

These are just the basics to get you started. For additional help, the U.S. Small Business Association provides detailed guidance on how to write the perfect business plan.

Further reading

Brightwheel is everything you need for your preschool or childcare center, in one simple app. Download it today!

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