7 Essential Items for Your Child Care Business Plan
In line with U.S.Bureau of Labor Statistics projections, daycare and childcare businesses have had some of the fastest employment growth of all industries between 2010-2020. Although this past year has been difficult for many, child care is still in high demand, and the future continues to look bright for the daycare industry.
When starting out, a business plan is a crucial document for any small business. A good business plan allows you to determine who you are and define your goals. A great plan will then lay out how you will embrace opportunities and overcome risks to achieve those goals.
When opening a new child care center, a business plan will give you focus and direction. Although each business plan is different, the major items in a business plan are relatively similar. You will want to think of the basics, such as where you should be located, who your customers will be, what will set your center (business) apart from others, and how you will make a return on your investment. As you get started on your plan consider each of the following topics to include.
1. Mission & Vision Statement
The first thing to include in your plan is who you are and what your ultimate purpose is. Include your business goals and mission & vision statement. Specify what you believe and what you would like to accomplish. Keep it short, sweet and straight to the point. This section of your business plan will set the tone for the rest of your plan.
2. Business Description
In this section you will want to explain your business; what you do, how you do it, and who you serve. Get specific here and define the specific demographic and community that you will serve. Also include information like your estimated start date, hours of operation, and any other information you can include to help someone understand how your center will run.
3. Competitive Market
Before you develop your business plan you should take time to really study the competition. Find out where nearby centers are located and write down their enrollment numbers, tuition costs, and hours in order to help create your business plan. This will give you a benchmark as well as help you find the best location for your center. Use graphs, charts and specific numbers to lay out the information clearly. Once you have a good grasp on the competition, you need to explain how your center will be different from the others.
4. Define Keys to Success
This section is very important, especially if you are planning to get funding assistance for your center. Defining the keys to your center’s success is important for any lender. In this section define what enrollment numbers you are projecting and what you will need to break even. Focus on things parents look for in a center, and explain how your center will be irresistible to your target market.
This is the section where you get to dream up your team. This will include the staff you need to run your center, the management structure, and ownership. You can also include any qualifications for each role and what you plan to pay staff in each role.
6. Center Licensing
If you have any intention of licensing your center I suggest including this section in your business plan. In this section you will define what type(s) of licensing or certification you’ll need, who your main contact is and also what the licensing steps will be. This will become a great road map to help navigate the journey to becoming fully licensed.
7. Financial Data
Last but not least, your plan must include your financial data. In this section you will explain your startup budget, the source(s) of funding for your budget, and what is included in that budget, such as monthly fees, tuition, or other sources of income. Once you have worked through the startup budget it is helpful to develop a 2 year growth plan as well. This will give an idea of where your center should be in 2 years, which is important information for both you and your lender(s).
Preparing a business plan can be intimidating but it doesn’t have to be. This is not an exhaustive list but should be plenty to get you started. As you begin to expand each of these sections it will ignite the creative process as well. My biggest advice is to do your research. Spend time investigating the competitive market to really see what you are competing against and compare their centers to yours.
Find out what they are charging, what they offer, and what they are missing. What do they do well that you could emulate, and what are they missing that you could provide? How can you provide exceptional care at a fair price? Can you set your center apart with features like enhanced security and access to technology?
By asking the right questions and answering them in a comprehensive business plan you will set yourself up for success by proving to investors, clients, and yourself that your passion for childcare makes your center a step above the rest!