how to make a business plan for a daycare

• How to Write a Business Plan for Daycare and Preschool
• brightwheel
• Running a business

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.

What do daycare investors want?

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 childcare licensing guidelines for your state and city. Once you’re clear on licensing guidelines, you’re ready to start writing your childcare business plan.

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.

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. 

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

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, insurance policies, operating policies and procedures, marketing strategy.

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.

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? 

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 of America offers some terrific budgeting resources for this process.

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.

Create a comprehensive handbook for families and staff that includes you center's policies and procedures. For instance, you'll need to develop an emergency plan , daycare sick policy , and other safety protocols according to your local childcare licensing requirements. 

Your staff handbook will be a helpful resource your employees can reference and include all your employment policies including work and pay schedules, benefits, and information about professional growth and development. You can also include information on your center's philosophy and curriculum, classroom procedures, and expectations for working with children and families.

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 differentiating yourself from other preschools. These days adopting daycare software is a surefire way to attract families with young children. A tool like brightwheel's center management feature will streamline your center's admission process, record keeping, and reporting, saving you up to 20 hours per month. 

You can also use brightwheel for recording and tracking daily events and activities, and sending real-time updates to families 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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Daycare Business Plan Template

It’s no secret—the demand for quality childcare is on the rise due to more parents heading back to work.

So, if you’ve ever thought of providing a safe and nurturing environment for children, now is the right time for you to start a daycare center!

However, establishing a successful daycare business takes more than just a passion for childcare. Well, it takes a solid business plan to stand out in the crowd and make it thrive as there are 568,000 daycare centers in the US alone.

Wondering how to create a daycare business plan?

Explore this daycare business plan template that walks you through all the key steps to draft an effective business plan for your daycare.

But first, let’s understand…

What is a daycare business plan?

A daycare business plan is the equivalent of a detailed blueprint for your business journey. This document clearly summarizes what your daycare stands for and outlines the strategies to launch childcare services.

Typically, it includes all the key elements of your daycare business, such as its concept, goals, target audience, marketing strategies, management structure, and financial projections.

Overall, this plan serves as a guide to establish, manage, and grow your daycare center effectively as well as ensures what you’re getting yourself into.

Why is a daycare business plan important?

A well-crafted daycare business plan is essential as it helps you add substantial value to your business at every stage. Here’s how it can make a difference:

1. Gives you clear direction

Starting and growing a daycare involves making several decisions, from choosing a location to deciding on the services you’ll offer.

Creating a business plan forces you to evaluate the right options, make informed decisions, and track progress over time. Plus, it helps you turn conceptual goals into definite objectives.

2. Helps you understand the target audience

For a successful daycare, you must understand the needs of parents and children in your community. Writing a business plan lets you organize your research and know your target market better.

Additionally, your plan ensures that you fulfill the needs of the families you serve, whether it’s infant care or after-school programs.

3. Lets you analyze the competition

While operating in the competitive market, you need to know what other popular daycare centers in your city offer. Developing a detailed business plan allows you to identify what your competitors do well and where they fall short.

Further, it helps you specify areas where you can stand out and position your daycare effectively by providing extended hours or unique programs.

4. Attracts and convinces investors

If you want to secure funding for starting and growing your daycare services, a business plan is crucial. A well-written business plan provides detailed financial projections and illustrates how your daycare will make money.

It also showcases the financial viability of your daycare services to potential investors or lenders and makes it easier to gain their support.

Simply put, preparing a detailed daycare business plan isn’t just a formality. But it’s a clear roadmap to navigate the intricacies of running a successful daycare, from startup to expansion.

How to write a business plan for daycare?

Preparing a good daycare business plan consists of a certain number of well-defined sections to articulate your childcare services.

Here’s a step-by-step guide to writing an excellent business plan.

1. Executive summary

An executive summary is one of the most important sections of your daycare business plan that serves as a pitch for potential investors who can provide you with funds for your childcare center.

Generally, it concisely summarizes your entire daycare business and previews everything you lay out inside the plan. Here’s what your daycare executive summary will include:

• Registered business name along with its location
• Daycare business concept and goals
• Mission-vision statements
• Target market & competition
• Marketing efforts & USPs
• Financial highlights

Overall, your plan summary provides a high-level overview of your daycare services and captures readers’ interest. So, be sure to make it short, simple, and persuasive as well as aim to keep it under two pages.

2. Company overview

The company overview section provides an in-depth understanding of your daycare business and its core values.

It covers all your business-specific details and foundational elements, from the daycare concept to its growth potential and future plans. This will help readers or investors better understand your daycare and make informed decisions.

To plan this section, you should consider emphasizing on the following:

• Type of daycare center you run (in-home, center-based, pre-school, after-school care, or daycare franchise)
• Legal structure (limited liability company, partnerships, or sole proprietorship)
• Location and reason for choosing that place
• Vision and mission statement
• Background history or milestones achieved (if any)
• Short-term goals & long-term objectives

Besides that, discuss any regulatory requirements and legal compliances involved in starting a daycare center. Also, ensure you follow health & safety policies, such as childproofing measures or illness prevention.

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3. Market analysis

The market analysis section provides a comprehensive overview of the childcare industry, its target audience, key competitors, and local market trends.

So, first, you’ll need to conduct thorough market research and explore the specific market niche in which your daycare intends to operate. Doing so will help you understand the demand for childcare services and the clients you will serve.

For instance, your target customers could be parents or guardians who consistently need safe and reliable daycare for their kids while they’re working or occupied with other duties.

Here’s a list of primary customer segments for a childcare business:

After that, shed light on the competition in your chosen area and evaluate the strengths & weaknesses of the other childcare centers.

Further, clearly articulate the competitive advantages and explain how your daycare stands out in the market. If required, perform a SWOT analysis to identify the internal & external factors that might affect your daycare.

4. Services offered

This section offers a detailed description of all the services your daycare will provide. It helps you demonstrate how your daycare will meet client needs and preferences.

For example, highlight all your child care services like infant care, full-day care, half-day care, after-school care, or special needs care.

If applicable, consider outlining any unique programs, such as educational curriculum, language classes, early childhood education, STEM (science, technology, engineering, and mathematics) activities, or arts & crafts.

Moreover, don’t forget to describe your operating hours, days of operation, and pricing strategies for each service offering.

5. Sales and marketing strategy

Your sales and marketing strategy outlines how you’ll promote your childcare business and reach your target customers.

It covers all the traditional advertising methods and digital promotional techniques you might use to attract families or working parents. This will help you build your brand’s identity and sustainable value in the market.

Here are some strategies you might include in your daycare marketing plan:

• Social media marketing (Instagram, Facebook, YouTube)
• Email marketing campaigns
• Collaborations or partnerships with local businesses
• Offline advertising in local newspapers or radio stations
• Loyalty programs or community events
• Regular communication & personalized customer service

Simply put, your marketing plan allows you to focus more on building and maintaining a loyal customer base as well as ensuring your daycare’s long-term success.

6. Management & organizational structure

Keeping a well-structured management team is especially crucial for a daycare service. It not only helps your business run smoother, but it also makes you look more responsible and reliable in front of the readers or primary lenders.

So, introduce the daycare owners, key managers, the team of childcare providers/caregivers, and administrative members in this section. Include their roles and responsibilities, educational qualifications, skills, as well as industry experience.

Furthermore, explain how each member fits their role and how their expertise benefits your business’s growth and success.

Then, try to create an organizational chart that illustrates how your team is structured and the relationships between key roles. Here’s an example:

You can also explain the compensation plan as well as mention advisory board members if your team is lacking. Highlight their specific expertise in providing strategic guidance to your childcare.

7. Operations plan

The operations plan provides a quick overview of the day-to-day activities and procedures required to run your childcare business smoothly and efficiently.

A well-written operations plan will help you and your team define the responsibilities and manage everyday processes. This will also allow you to meet business goals and client commitments while ensuring optimal results.

So, consider including the following details in your business operations plan:

• Staffing requirements & training
• Daily operations (opening/closing procedures, child drop-off & pick-up, meal times, activity schedules)
• Daycare facility and ambiance
• Cleaning schedules & equipment maintenance
• Customer service protocols

In short, this section presents your childcare’s operational intricacies and clarifies how they directly impact your service quality. So, don’t skip any essential points.

8. Financial plan

Financial planning is mandatory while writing a childcare business plan as it helps you lay a strong foundation for the financial health and sustainability of your daycare.

So, in your daycare financial plan , provide a detailed analysis of your financial projections for the next 5-7 years.

Consider incorporating these key financial statements and reports:

• Startup costs
• Revenue forecasts
• Operating expenses
• Cash flow estimates
• Break-even analysis
• Funding needs and sources
• Contingency plans

By developing realistic and comprehensive financial projections, you show potential investors or lenders that you have a solid understanding of the financial requirements and challenges of running a successful daycare.

Further, it helps you build confidence and credibility as well as increases your chances of securing the necessary support for long-term success.

For instance, you may consider formulating the key financial projections as shown below:

Income statement

Cash flow statement

Balance sheet

Download a sample daycare business plan template

So, ready to kickstart your daycare business plan writing? But need more assistance? Well, here you go; download our free daycare business plan PDF to get started.

It’s a modern business plan template that has been designed specifically for daycare businesses. It comes with step-by-step guides and examples to help you develop your own plan.

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Daycare business plan summary

Now that we’ve discussed all the key sections of a daycare business plan and how to draft them, it should be much easier for you to write a professional business plan.

However, if you’re still confused or need extra help in presenting your plan, consider using modern business plan software . It helps you create an actionable and comprehensive business plan more effectively and quickly.

So, wait no longer; start planning today!

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Frequently Asked Questions

What are the key factors investors look for in a daycare business plan.

The following are the key factors that investors look for in a daycare business plan:

• Market research & competitive landscape
• Financial performance and projections
• Unique Selling Propositions (USPs)
• Relevant experience in the childcare industry
• Funding requirements and use of funds
• Marketing plan

What to include in your daycare business plan?

While writing a solid daycare business plan, consider including the sections mentioned below:

• Executive summary
• Business description
• Daycare industry and market research
• Service description
• Sales and marketing plan
• Management team
• Operations plan
• Financial projections

How long should my daycare business plan be?

The length of a detailed daycare business plan might be 15-30 pages that cover all the essential elements like business goals, target market, services offered, operations plan, marketing strategy, and financial plan.

However, the business plan length may vary depending on the complexities of your services and the level of detail required.

How to make a childcare business plan?

Follow these steps to make a childcare business plan:

• Provide a brief summary of your childcare business, including its mission, vision, goals, and strategies to achieve them.
• Describe your business concept, child care services, and unique offerings.
• Analyze the local market and identify the target audience, key competitors, as well as the demand for childcare.
• Outline the business structure and shed light on the management team, including roles & responsibilities, qualifications, and experience.
• Highlight strategies you’ll use to attract and retain clients.
• Include financial needs, startup costs, revenue forecasts, and operating expenses.
• Discuss day-to-day operations, staffing & training, regulatory requirements, and childcare facilities.

How often should I update my daycare business plan?

It’s important to review and update your daycare business plan regularly, at least once a year, or more often as your business evolves. Additionally, you may update your business plan whenever significant changes happen in the regulatory environment or competitive landscape.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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