- Do you feel confused before starting the daycare business?
- Are you afraid of the financial costs?
- Do you want to create a clear checklist for the daycare startup?
Indeed, opening a daycare is a very responsible task. It can also be very rewarding in case the daycare business planning goes smoothly. Were you dreaming of business that could make children happy or that could fill your home with childish giggling and laughter? You should proceed reading if you would like to know how to make your dream come true.
5 simple steps how to get your daycare business started
1. Localization of the business needs
How will you tailor your business to the daycare needs of your community? What is the age group of children you are aiming at? How many families in the area require the daycare center? How will you differentiate from your competitors? What is your motivation for launching the daycare?
At this stage, you should prepare the comprehensive insight into your competitors, their enrollment numbers, ages of the children they care for, hours, and tuition costs, the locations of the daycare centers. Analysis of the market will prove helpful in defining the strengths and weaknesses of your main competitors.
It would be best if you did not forget about the appropriate location. Parents of the child choose the daycare based on the proximity to their place of work or home. It often happens that they prefer the closest one for the reasons of the time economy and efficiency. Talk to families you know what their preferences to choose the suitable location of your daycare are.
Decide for yourself what can serve as your unique contribution to the local community with the child care business. Check out the needs of children that are yet not satisfied in the existing daycare locations in the area. It is probably the location that you want to address it. If the daycare centers in the field lack the academic advancement activities or qualified caregivers, then your first and foremost goal is to fill in the gaps and provide families with high-quality daycare.
2. Write the business plan for the daycare business
With the knowledge of your target audience, location costs, market analysis, and your daycare mission, you are prepared for the most crucial step — creating the business plan for your future daycare.
According to the USA Small Business Administration, the standard well-composed business plan should contain the following articles:
- Executive summary consisting of the daycare service you plan to offer, your target audience, future of your daycare business: do you plan to stay local? What are your opportunities in the market?
- Company description consisting of the mission statement, principal members: owner, accountant, marketing manager, family childcare operator, teachers, and their aides; the legal structure of the company: sole proprietorship, incorporation, partnership, or tax-exempt organization
- Market Research what are the trends in the daycare industry; a detailed description of the potential customers: part-time working or full-time working families, young families, or families that cannot afford the babysitter; company advantages
In the company advantages section, you can mention your educational philosophy. You can research the most trustworthy for you. There are lots of diverse options to choose from: the Montessori Method of Education based on the freedom of the child’s activity within certain limits of the tasks or environment; the Waldorf developmental approach with the focus on the story-telling and experimentation; or the Reggio Emilia’s philosophy of children being active participators in the process of learning.
For the marketing Improvement, you can issue the brief questionnaires to your customers where did they get to know you from and asking for their feedback on behalf of the services you offer.
- Service line What is the service you are offering; with the detailed analysis of the numbers of the enrolled children, their age, the capacity of the daycare center, the time frames for parents to bring or pick children up; pricing structure of the service The range of your daycare services can include the full-time daycare, after-school care, nontraditional hours (at nights, for the weekends), on-demand care, and other options. It would help if you decided how much will your charge for tuition costs, the deadlines for the payments, the discount offers. For this, you can refer to the site of the Childcare Aware of America and compare the affordability and the prices of the daycare in different states: https://usa.childcareaware.org/advocacy-public-policy/resources/priceofcare/.
- Marketing and Sales How will you market your daycare: through social media, local radio, website, banners; what is your estimated revenue growth and sales volume. Also, include the marketing expenses and sales growth in the financial model template for the daycare that is mentioned below.
3. Create the daycare financial model
Before determining your pricing strategy, you need to consult and adjust, if required, your finances. The easiest way to do that is to create the personalized, flexible financial model for the daycare business:
Ten (10) reasons: How does the daycare financial model make your life easier?
- It can make all the essential predictions of your profit, revenue, and losses based on the data you insert;
- It can show you when your business becomes profitable for you (break-even point);
- With its help you can adjust your expenditure for the daycare business;
- You can also grasp the idea of your main cost-consuming categories of business (like salaries for the personnel or training costs);
- You can keep track of the funding obligations (debts, regular payments like taxes);
- You will be able to see your daycare business performance visualized in graphs and diagrams;
- It is a helpful and persuasive tool if you were to pitch your daycare to the investors to gain some extra funding;
- You can test different assumptions to analyze the impact of those on the financial outcomes;
- The daycare financial model provides you with the income statement, balance sheet, and a cash flow statement;
- It will avail you of setting the financials goals and adjusting them, giving you full control over the finances.
4. Obtain the necessary licensing and insurance
The license grants you the legal basis for the operation. The licensing requirements change from state to state. You can investigate more here: https://www.childcareaware.org/resources/map/. The license touches upon the maximum number of children, the minimum number of children per adult, health and safety standards check, nutrition and food checks, educational requirements. You can also be required to have a criminal background check on the child care employees.
You will also need to purchase the range of insurances to be ready for the unfortunate occasions at the workplace. The Child Care Aware lists such guarantees as to the business owner’s insurance (the combination of the liability and property insurance); professional liability insurance (you and your employees are insured for the losses due to negligence during the work); worker’s compensation insurance.
5. Hire your daycare workers
Your workers and their qualifications should reflect in the best possible way your intentions concerning the quality caregiving as well as the attractive educational philosophy. Make sure your teachers have at least some experience of working with children. The essential properties of your employees should include their love and affection for children, stress tolerance, creativity, and the capacity to engage with children. Keep in mind that profiling and choosing child care teachers have to be based on your first educational approach at the daycare.
Remember that you should also stick to the state-specific requirements for your staff to obtain the license for the daycare operation.
Eventually, stay positive about your daycare perspectives. Get yourself on board with clear objectives and unshakable faith in your potential. Plan your expenses with the help of the daycare financial model. Ensure that you stick to the state requirements in terms of the licensing and insurance policies. You can make your business fully operational using the tips I have outlined. On you go with the high-quality daycare business!