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How to Write a Business Plan for Daycare and Preschool

Discover our top tips for writing a strong daycare and preschool business plan

How to Write the Perfect Daycare Business Plan

People sitting at a table reviewing business graphs

Writing a daycare or preschool business plan is a big task, but due diligence and hard work will help you understand what you’ll need to launch and run a daycare or preschool successfully.

Your local government will have rules and regulations you’ll need to follow as a small business owner and childcare provider. Start by reviewing the  Child Care Aware of America’s licensing guidelines for your state and city.

people sitting around a table reviewing a business graph

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Once you’re clear on licensing guidelines, you’re ready to start your childcare business plan. But, before we dive into building it, let’s look at what investors might want from you and your plan.

What do daycare investors want?

The purpose of a business plan is to help secure funding. You’ll likely need financing to launch your preschool or daycare, especially if you want to avoid the monthly repayment of a loan. 

Investors provide businesses with money in exchange for partial ownership. As a result, they expect a larger return on their initial investment. Because many investors work in business, they prefer to invest in an established company.

Most investors look for:

  • Industry background and experience
  • Financial performance and promise

Industry background and experience

Investors want to make money. Therefore, they are more inclined to work with experienced entrepreneurs and business owners to guarantee a return on their investment. 

This might sound discouraging for those with little experience or without a business management background, but the opportunity doesn’t end there. You could consider bringing on a partner with a business background. Additionally, many investors act as a source of business advice. 

Financial performance and promise

You need to demonstrate that your business will make money. Investors will likely want to see signs of business growth before they give you money. 

Additionally, investors will want to know about your financial stability. Questions an investor might ask are:

  • What do you plan to do with the money?
  • Has your business been up or down in recent years?
  • Is your company losing money? Are there signs of growth for the future?
  • How do you plan to repay your investment?

Of course, every investor is different, so they’ll consider various factors. While experience and financial promise are at the top of the list for most investors, they might also look for uniqueness, business readiness, an effective business model, and more.

Writing a daycare business plan

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We’ve discussed licensing and investors. Now, you’re ready to begin the framework of your business plan for daycares and preschools. Here’s what you’ll need to get started:

  • Business description
  • Needs assessment
  • Budgets
  • Insurance policies
  • Operating policies and procedures
  • Marketing plan

Business description

Start with the basics: what does your daycare do? Detailing the service you’re offering will help you create a clear business plan. Next, you might want to write some goals or even a mission statement outlining your purpose and motivation.

Needs assessment

Start by looking at general daycare or preschool industry trends, then narrow your scope to the preschools or daycares in your local area. Next, you’ll need to figure out who your target customers are and confirm that there is a need for a business like yours in your community. 

Are there a lot of young families in your neighborhood? Are you located somewhere convenient for commuting parents? Does your business offer a specific service that your competitors don’t, like early check-in or extended hours? 

Also, check out the competition. Research the existing daycare or preschool options in your community. Look at current preschool or daycare business plan samples. What makes your daycare or preschool unique? 

Budgets

Developing detailed budgets will help you run your small business. You’ll need to compare your current cash flow and expenditures to determine whether you’ll make a profit.

Build a budget for unexpected costs. For example, how many children do you need to serve to be able to pay your bills and stay afloat? Child Care Aware offers some terrific planning worksheets for this process.

Insurance policies

Depending on the type and size of your preschool, you’ll need insurance policies of several different types, including liability, property, workers’ compensation, and business insurance. Check the licensing requirements for guidance in building this part of your preschool business plan.

Operating policies & procedures

Write out policies, procedures, and handbooks for your staff and families. Again, Child Care Aware offers a detailed guide to this process. 

Verify the licensing requirements for staff ratios and teachers’ educational backgrounds. In addition, childcare staff should undergo criminal background checks and fingerprinting. Finally, be sure to verify references and education levels rigorously. 

Childcare job posting template-png

Download our free childcare and preschool job posting template!

You’ll also need to develop a disaster or crisis management plan and health, safety, privacy, and nutrition protocols, all according to your local childcare licensing requirements.

Marketing strategy 

Your marketing strategy is the key to attracting customers. Decide what type of advertising you will use in front of potential customers. For example, list your school in local directories and participate in parenting and kid-friendly community events. Run a social media campaign focusing on your target population.

Another big part of childcare business marketing is considering differentiating yourself from other preschools. These days adopting daycare software is a surefire way to attract families with young children. Brightwheel is an easy-to-use software platform that will help you manage your daycare or preschool 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 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 and handle all of your administrative tasks in one place.

Your business is ready!

Writing a business plan can be stressful, but it doesn’t have to be. Once you secure the proper licensing, use the information in this article to guide you through creating a solid daycare business plan that drives investors and financing to your business.

These are just the basics to get you started. For further information, the U.S. Small Business Administration’s website has detailed instructions on creating each necessary part of a successful business plan. 

 

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