Child Care Business Plan

Business Plan Articles

If you are starting a child care business, it is likely that you will need a business plan at some point to provide the investors or plan out your intended approach. The experts at Pro Business Plans have worked with many child care providers to prepare plans for investment and strategy. This article provides information regarding what is included in a child care business plan and how it is typically structured.

child care business plan

Child Care Business Plan

Although it may appear at first that all child care companies are the same, there are a wide array of unique considerations that will influence the success of each one. Among these include the location of the business, its unique positioning in the market, and how large it will be. For instance, a small child care center that is home based may tailor to the neighbors and local friends. A larger one that has a separate brick & mortar location may target high income individuals and focus on education and early development. Every business can be equally successful, but it is up to the entrepreneur to position it for success.

Business Model

The business model for a child care business plan is based around a simple value proposition of providing a safe and secure environment for children while their parents are unable to be home. However, the competitive nature of the industry often makes it difficult to have a simple business model that competes only on price and location.The success of a child care business plan is also driven by the positioning and reputation of the center. Some may invest in state of the art security systems to give parents a peach of mind, in addition to hiring heavily vetted staff with a background in early childhood development. However, such elements demand a higher cost that not all families can afford, so it makes sense to adjust the business model relative to the competitors and based on the local market environment.

market positioning


The location for a child care business is a definite success factor, as the proximity to competitors and convenience to clients are two key elements which will determine your success. Being in a downtown location may be convenient for most white collar professions, but remember that high overhead does not always cover the added client base for this.

team management


It may initially seem as though the positioning of a child care business is irrelevant. Many companies may appear identical and the parent’s decision may be based solely on location and price. This is certainly not the case, as some prefer their children to engage in a collaborative learning environment with well vetted staff and are willing to pay the price, whereas others want basic no frills service.

Marketing Plan

The marketing section of a child care business plan is focused around reputation management and referrals. The most effective way for a daycare to achieve new clients is to have a strong and positive image in the market. As soon as this falters and trust is put into question, the stability of the daycare is at risk. Therefore, it is highly important to ensure that parents share their positive experiences online through sites such as Google Places and Yelp! When parents experience problems, it is even more critical to address them as they arise before they speak about them to other parties. Research has suggested that customer loyalty may actually increase if problems are effectively resolved, otherwise the customer complains in order to satisfy their need for revenge.

trade shows

Promotional Strategy

The promotional strategy for a child care business plan is based on a variety of factors. The goal at the outset is to acquire the first initial round of customers with little operating history to have a brand reputation. This can be accomplished through a variety of methods including public relations, direct mail advertising, and having flyers distributed within the community.

business development

Reputation Management

As the business scales, reputation management will play an increasingly important role towards scaling the business to a stable and sustainable point. You must not only ensure that customers are consistently satisfied, but promote their satisfaction online and through references in order to build a larger customer base.

Financial Projections

The financial projections for a child care business plan will likely be requested by banks or investors. These projections will help them to either analyze your historical performance or estimate the feasibility of reaching a satisfactory return. The typical set of financial projections include three to five year projections in the form of an income statement, cash flow forecast, balance sheet, and consolidated profit & loss forecast. These help analysts to have access to all of the needed information in order to form a consensus regarding your day care. Having a reliable financial model will also assist you to make more informed decisions regarding the investment.

revenue projections

Revenue Forecasts

The revenue forecasts section of a child care business plan can be easily determined based on your capacity level (I.e. the number of children that you provide service for) and forecasted demand level. The most important revenue projection period will be at the outset, when you have little operating history and need to quickly acquire your first round of clients in order to achieve profitability early on.

budget forecasts

Budget Forecasts

The expense forecast for a day care should be highly detailed and extremely conservative, as the worst possible instance you can run into is under forecasting your expenses. Most companies fail because of the inability to accurately plan for financial expenditures, so don’t be overly optimistic and afraid to ask for more than you think you need, as its highly likely that you will.

What is Included in Our Custom Child Care Business Plan?

  • Marketing Plan
  • SWOT Analysis
  • Competitive Analysis
  • Profitability Analysis
  • Personnel Plan
  • Organizational Chart
  • Company Valuation
  • Executive Summary
  • Company Description
  • Keys to Success
  • Three Year Objectives
  • Product or Service Description
  • Market Research
  • Fundraising Support
  • 12 Month & 3 Year Profit & Loss
  • 3 Year Balance Sheet
  • 12 Month & 3 Year Sales Forecast
  • 12 Month & 3 Year Cash Flows
  • Break-Even Analysis
  • Financial Ratio Analysis
  • Management Team

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