(+1) 9784800910, (+44) 020 3097 1639 [email protected]
Select Page
Childcare Business Plan

Executive Summary

Overview:  We are a community of educators who have left a legacy of self-assured children who have progressed to higher education built on a foundation of the play. Our education team at Celebree School comprises specialists passionate about early childhood development because we are dedicated to safeguarding, teaching, and nurturing the children in our care. This implies that the proprietors of local child learning centers are present and engaged. It’s not a job; it’s a passion to educate and care for children.

Mission:  Our mission is to create a safe, stable learning environment where students may build a strong foundation for lifetime achievement.

Vision: Our vision is to be the industry leader in delivering exceptional care for newborns, toddlers, preschoolers, and school-aged children.

Industry Overview: Working families benefit from the child care sector since it offers daycare for newborns and children and preschool training to prepare them for kindergarten. There are two types of daycares in the industry: center-based and at-home. The most considerable industry income comes from center-based daycares, typically more significant in size and enrollment. Because the staff-to-child ratio restricts them, home daycare providers often employ just one primary caregiver (a non-employer). As a result, their registration is substantially lower. Before the epidemic, industry operators had consistently increased yearly income. However, most daycare facilities were compelled to close and temporarily lose revenue due to fears about infection. Domestic, commercial activity has resumed as mass vaccination campaigns continue across the United States. Many states have relaxed or eliminated health and safety regulations like mask requirements and indoor capacity limitations. Local and state legislative responses to restarting commercial activity will directly impact industry revival.

Financial Overview:

Childcare Business Plan Financial Overview

Financials is one of the most important sections of a child care business plan. You can get an idea of your projected revenue, required investment amount, is the business sustainable without additional funding, etc.

Financial Highlights:

Liquidity2020A2021A2022F2023F2024F
Current ratio612233242
Quick ratio611223140
DSO88888
Solvency
Interest coverage ratio8.211.114.2
Debt to asset ratio0.010.010.20.180.16
Profitability
Gross profit margin51%51%53%53%53%
EBITDA margin12%14%21%22%22%
Return on asset5%6%13%14%14%
Return on equity5%6%16%17%17%

Fund Usage

Childcare Business Plan Fund Usage

The industry analysis section of the child care business plan will help you get better insights into competitors, market growth, and overall industry prospects. You can order a custom market research report for your child care business.

Industry Analysis

In 2019, the US child care market was valued at USD 54.3 billion, and it is expected to grow at a CAGR of 3.9 percent between 2020 and 2027. The market is likely to be driven by a rise in working parents and childcare needs. According to a poll performed by the Center for American Progress, around 2.0 million parents had to forgo their careers in 2016 owing to childcare-related issues. There is a growing understanding of the relationship between economic development, parental employment, and child care access, which is predicted to improve the availability of low-cost child care facilities. Child care costs account for a large portion of a family’s budget, according to the Child Care Aware of America study ‘Parents and the High Cost of Child Care’ published in 2019. To address this issue, the Child Care Development Block Grant (CCDBG) received USD 5.3 billion in increased financing in 2019. Over the projected period, the growing trend of businesses providing onsite or nearby childcare services for their workers is likely to boost the market growth. Early childhood educators take the steps required to guarantee that all children get an adequate education. Parma City Schools launched Kindergarten Launch Academy in May 2020, a program that focuses on problem-solving, core reading, numeracy abilities, and social and emotional development to prepare younger children for kindergarten.

Childcare Business Plan Industry Analysis

While working on the industry analysis section of the child care business plan make sure that you add significant number of stats to support your claims and use proper referencing so that your lender can validate the data.

In 2019, the early education and childcare sector led the child care market in the United States, accounting for the most revenue. Due to an increase in the number of childcare and early education establishments. In 2019, over 1.4 million and 3.7 million pupils were enrolled in prekindergarten and kindergarten, indicating that the demand for early education is outpacing the supply.

Furthermore, the provision of at-home childcare services assists in alleviating the daycare deficit. The Fab Lab launched a virtual child care exhibition in March 2020, and the ‘Rain the Growth Agency’ supported it. A live daily virtual child care show in the form of a supplemental educational program is included in the show, which provides for storytime, fitness exercises, and snack suggestions.

In 2019, organized care facilities dominated the market, accounting for the most revenue. In addition, from 2020 to 2027, the category is predicted to increase at the quickest pace. The class is likely to be driven by increased working parents and the need for childcare services. Over the projection period, the home-based settings market is expected to increase significantly.

The market is defined by rising demand for child care centers, government policies, and service providers’ expansion plans. Some of the issues parents experience when selecting child care services include the quality of care and the availability of slots. As a result, service providers turn to technology to help parents choose child care. Bright Horizons introduced a smartphone app in June 2018 that allows parents to make backup care bookings when regular care is unavailable. In the United States, the continuing COVID-19 epidemic has primarily impacted child care. However, following a brief interruption, several service providers are restarting operations. According to Procare Solutions, a vendor of childcare management software, roughly 46.0 percent of the 61.0 percent of childcare facilities that closed in March returned in June 2020 after receiving approval from the majority of states. In June 2020, Amazon announced that 650,000 part-time and full-time Whole Foods Market and Amazon workers would be eligible for family care benefits via Care.com. Until January 2021, every employee will be eligible for subsidized emergency child care for up to ten days.

Childcare Business Plan Industry Analysis

In 2019, organized care facilities dominated the market, accounting for the most revenue. In addition, from 2020 to 2027, the category is predicted to increase at the quickest pace. The need for childcare services and growth in the number of working parents are anticipated to boost the variety. The market for home-based settings is predicted to grow considerably throughout the forecast period. The market is defined by rising demand for child care centers, government policies, and service providers’ expansion plans. Some of the issues parents experience when selecting child care services include the quality of care and the availability of slots. As a result, service providers turn to technology to help parents choose child care. Bright Horizons introduced a smartphone app in June 2018 that allows parents to make backup care bookings when regular care is unavailable. Early childhood educators take the necessary steps to guarantee that all children get a high-quality education. Parma City Schools will launch Kindergarten Launch Academy in May 2020, emphasizing problem-solving, core reading, numeracy abilities, and social and emotional development to prepare children for kindergarten.

Marketing Plan

A key part of the marketing plan in a child care business plan is the marketing budget. The growth in the number of customers is proportional to the budget and dependent on the CAC.

Childcare Business Plan Marketing Plan

Content Marketing: Create a blog on the website with material catering to prospective customers. Content marketing is the development and distribution of relevant, helpful content—blogs, newsletters, white papers, social media posts, emails, videos, and the like—to current and potential customers. 

Discounts: Provide multiple rewards or incentives where members get a deal if they successfully recommend someone.

Social Media: Engage and promote on Twitter, publish news on Facebook, and utilize Instagram to promote curated photos of your space and events. Think about if you have a place in your budget for Facebook Marketing or other social media-focused ads.

SEO (Search Engine Optimization) Local SEO makes it easier for local consumers to find out what you have to offer. It creates trust with potential members seeking what your place offers.

Email Marketing: Sending automated in-product and website communications to reach out to consumers at the right time. Remember that if your client or target views your email as really important, they are more likely to forward it or share it with others, so include social media share buttons in every email.

Organogram

Childcare Business Plan Organogram

Financial Plan:

This section of the child care business plan helps your lender figure out whether you will be able to pay off the loan, whether the business is sustainable, what are the growth prospects, etc.

Earnings:

Childcare Business Plan Financial Plan

Break-Even Analysis:

Childcare Business Plan Financial Plan

Income Statement:

2020A2021A2022F2023F2024F
ANNUAL REVENUE
Item 19,21759,117175,410415,277781,357
Item 234,701222,558660,3681,563,3942,941,580
Item 34,06719,56146,43278,519114,905
Total annual revenue47,985301,236882,2112,057,1893,837,842
% increase528%193%133%87%
COST of REVENUE
Item 13602,2596,61715,42928,784
Item 24803,0128,82220,57238,378
Item 352,00065,00078,00091,000104,000
Item 47203,6158,82216,45823,027
Item 5140,000336,000560,000840,0001,120,000
Item 660,000144,000240,000360,000480,000
Item 732,00061,33385,533112,153141,435
Total Cost of Revenue285,560615,220987,7941,455,6121,935,625
as % of revenue595%204%112%71%50%
Gross Profit-237,575-313,984-105,583601,5781,902,218
SELLING & ADMIN EXPENSES
Item 128,00096,800154,880175,692193,261
Item 275,000105,000120,000120,000120,000
Item 336,00096,000108,000120,000120,000
Item 48,00012,00012,00012,00012,000
Item 53,83918,07444,11161,716115,135
Item 63,35912,04926,46641,14476,757
Item 75,60010,00012,90415,03417,376
Item 86,66714,00022,06730,94040,701
Total selling & admin expenses166,464363,924500,428576,525695,230
as % of revenue347%121%57%28%18%
Net profit-404,039-677,907-606,01125,0521,206,987
Accumulated net profit-404,039-1,081,947-1,687,957-1,662,905-455,918

Cash Flow Statement:

2020A2021A2022F2023F2024F
CASH FLOW from OPERATING ACTIVITIES
Net profit before tax-$404,039-$677,907-$606,011$25,052$1,206,987
Depreciation$44,267$85,333$120,504$158,127$199,512
Payables
Item 1$4,333$5,417$6,500$7,583$8,667
Item 2$11,667$28,000$46,667$70,000$93,333
Item 3$6,250$8,750$10,000$10,000$10,000
Item 4$3,000$8,000$9,000$10,000$10,000
Item 5$667$1,000$1,000$1,000$1,000
Total payables$25,917$51,167$73,167$98,583$123,000
change in payables$25,917$25,250$22,000$25,417$24,417
Receivables
Item 1$320$1,506$3,676$5,143$9,595
Item 2$360$1,807$4,411$8,229$11,514
Total receivables$680$3,314$8,087$13,372$21,108
change in receivables-$680-$2,634-$4,773-$5,285-$7,736
Net cash flow from operating activities-$334,536-$569,958-$468,280$203,311$1,423,180
CASH FLOW from INVESTING ACTIVITIES
Item 1$16,000$13,200$14,520$15,972$17,569
Item 2$20,000$22,000$24,200$26,620$29,282
Item 3$28,000$22,000$14,520$10,648$11,713
Item 4$96,000$88,000$72,600$79,860$87,846
Item 5$20,000$22,000$24,200$26,620$29,282
Net cash flow/ (outflow) from investing activities-$180,000-$167,200-$150,040-$159,720-$175,692
CASH FLOW from FINANCING ACTIVITIES
Equity$400,000$440,000$484,000$532,400$585,640
Net cash flow from financing activities$400,000$440,000$484,000$532,400$585,640
Net (decrease)/ increase in cash/ cash equivalents-$114,536-$297,158-$134,320$575,991$1,833,128
Cash and cash equivalents at the beginning of the year-$114,536-$411,693-$546,014$29,978
Cash & cash equivalents at the end of the year-$114,536-$411,693-$546,014$29,978$1,863,105

Balance Sheet

2020A2021A2022F2023F2024F
NON-CURRENT ASSETS
Item 1$16,000$29,200$43,720$59,692$77,261
Item 2$20,000$42,000$66,200$92,820$122,102
Item 3$28,000$50,000$64,520$75,168$86,881
Item 4$96,000$184,000$256,600$336,460$424,306
Item 5$20,000$42,000$66,200$92,820$122,102
Total$180,000$347,200$497,240$656,960$832,652
Accumulated depreciation$44,267$129,600$250,104$408,231$607,743
Net non-current assets$135,733$217,600$247,136$248,729$224,909
CURRENT ASSETS
Cash-$114,536-$411,693-$546,014$29,978$1,863,105
Accounts receivables$680$3,314$8,087$13,372$21,108
Total current assets-$113,856-$408,380-$537,927$43,349$1,884,214
Total Assets$21,878-$190,780-$290,791$292,078$2,109,122
LIABILITIES
Account payables$25,917$51,167$73,167$98,583$123,000
Total liabilities$25,917$51,167$73,167$98,583$123,000
EQUITIES
Owner’s equity$400,000$840,000$1,324,000$1,856,400$2,442,040
Accumulated net profit-$404,039-$1,081,947-$1,687,957-$1,662,905-$455,918
Total equities-$4,039-$241,947-$363,957$193,495$1,986,122
Total liabilities & equities$21,878-$190,780-$290,791$292,078$2,109,122