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Executive Summary

Your executive summary is the first part of your business plan, but you usually write it last because it’s a summary of all the important parts.

The purpose of your Executive Summary is to quickly grab the reader’s attention. Tell them what kind of child care business you run and where it is. For example, are you just starting out, do you want to grow your child care, or do you run a chain of child care businesses?

Next, give a quick summary of each part of your plan. For instance, you could give a short overview of the child care business. Talk about the type of daycare you are running. Detail your direct competitors. Describe your ideal customers. Briefly describe your marketing plan. Find the key players on your team. And tell us how you plan to handle your money.

Company Analysis

In your business analysis, you will talk about what kind of child care business you run.

You could, for example, run one of the following:

  1. Home-Based Child Care: This type of child care business is run out of your home and usually has one or two caregivers.
  1. Child Care Center: A child care center is a business that takes care of children. Most of the time, it has a lot of staff and caretakers and can help a lot of kids.
  1. Pre-school child care is a type of day care that focuses on preschool-aged kids.
  1. School-Age Child Care is a business that takes care of mostly school-aged children.

In the section of your business plan called “Company Analysis,” you need to explain what kind of child care you run and give some background on the business.

Questions like these should be answered:

  • When and why did you start your own business?
  • What are the most important steps you’ve taken so far? As milestones, you could use sales goals, new program offerings, etc.
  • Your legal structure. Do you run your business as an S-Corporation? An LLC? A business with just one person? Tell us about your legal structure.

Industry Analysis

In your industry analysis, you should talk about the business of taking care of children.

Even though this seems useless, it can be used in more than one way.

First of all, learning about the child care business gives you information. It helps you understand the market better.

Second, market research can help your strategy, especially if it shows you what the market trends are. For instance, if there is a trend toward child care that includes transportation, it would be helpful to make sure that your plan includes this service.

A third reason to do market research is to show your readers that you know a lot about your field. You do that by doing the research and putting it in your plan.

In the section of your child care business plan called “Industry Analysis,” you should answer the following questions:

  • How much money does the child care business make each year?
  • Is the market going down or up?
  • Who are the biggest rivals in the local or national market?
  • What changes are happening in the industry of child care?
  • How fast is the industry expected to grow in the next 5–10 years?
  • How big is the market that matters? That is, how big could your child care market be? You can figure out a number like this by figuring out how big the market is in the whole country and then applying that number to your local population.

Customer Analysis

In the customer analysis part of your business plan for a child care center, you must explain who you serve and/or who you hope to serve.

Here are some examples of customer segments: soccer moms, young families, baby boomers taking care of their grandchildren, etc.

Try to figure out who your best customers are based on how they look and what they think. Talk about the ages, genders, locations, and levels of income of the people you want to serve. Because most child care businesses mostly serve people in their own city or town, it is easy to find this kind of demographic information on government websites.

Psychographic profiles explain what your ideal customers want and need. If you can understand and define these needs well, it will be easier to get customers and keep them coming back.

Competitive Analysis

In your competitive analysis, you should list both direct and indirect competitors for your business and then focus on the direct ones.

Most of their competition comes from other child care businesses.

There are other options for customers that aren’t direct competitors. This means, among other things, keeping kids at home or giving them something to do after school.

Concerning direct competition, you should make a list of the other child care businesses with which you compete directly. Most likely, your direct competitors will be the child care businesses that are closest to you.

Give an overview of each of these competitors’ businesses and a list of their strengths and weaknesses. You won’t know everything about your competitors unless you’ve worked at one of their companies. But you should be able to find out important information about them, like:

  • Who are the clients they work with?
  • What kinds of care do they have for kids?
  • When are they open?
  • What are the prices (high, low, etc.)?
  • What are they really good at?
  • Why do they mess up?

Try to answer the last two questions from the customer’s point of view.

In the last part of your competitive analysis, you should list the ways you are better than your competitors. For instance:

  • Will you take great care of children?
  • Will you offer child care services that your competitors don’t have?
  • Will you make better prices?

In this part of your plan, you should think about how you will do better than your competitors and write those ideas down.

Marketing Plan

Usually, a marketing plan includes four parts: the product, the price, the place, and the promotion. For a child care center business plan, your marketing plan should include:

Product:In the part about the product, you should repeat the type of child care you wrote about in your Company Analysis. Then, give a detailed description of what services you will be offering. For instance, will you teach the kids about technology or fitness?

Price: Write down what you’ll be charging and how it compares to what your competitors are charging. In your marketing plan, you list the items on your menu and how much they cost in the “Product” and “Price” sections.

Place is the name for the place where your child care is. Write down where you are and how it will affect your success. For example, is your day care next to a busy office building, gym, etc.? Talk about how people could keep coming to your location.

Promotions: The last part of your child care marketing plan is about promotions. Here, you’ll list how you’ll get people to your location (s). Here are a few ways you could promote your business:

  • Flyers
  • Marketing with social media
  • Getting in touch with local blogs and websites (especially “mommy bloggers”)
  • Local radio advertising
  • Banner ads at local venues

Operations Plan

You wrote about your goals in other parts of your business plan. In your operations plan, you talk about how you will reach these goals. Your operations plan should have two different parts.

Everyday short-term processes include all of the things you need to do to run your child care, such as talking to potential new customers, buying supplies, keeping the child care center clean, etc.

Long-term goals are the things you want to accomplish in the future. These could include dates like when you hope to help your 100th child or make $X in sales. It could also be when you plan to hire your fourth employee or open a new store.

Management Team

If you want to show that your child care can work as a business, you must have a strong management team. Showcase the backgrounds of your key players, focusing on the skills and experiences that show they can help a company grow.

You and/or the people on your team should have experience working in the child care business. If so, talk about your skills and experience. But you should also talk about any experience you have that you think will help your business succeed.

If your team is missing something, you may want to form an advisory board. The same way that a mentor would help your business, a two-to-eight-person advisory board would do the same. They would help answer questions and give suggestions about how to plan. If you need to, try to find advisory board members who have worked in child care businesses or who have run small and retail businesses successfully.

Financial Plan

Your financial plan should include a 5-year financial statement with monthly or quarterly breakdowns for the first year and annual breakdowns after that. Your income statement, balance sheet, and cash flow statement are all part of your financial statements.

Income Statement: Usually, an income statement is called a Profit and Loss statement, or P&L. It shows your income, then subtracts your costs to show if you made a profit or not.

When making your income statement, you have to make assumptions. For example, will you feed 10 children a day or 50? And will sales grow by 2% or 10% per year? As you might guess, the choices you make about your assumptions will have a big effect on the financial forecasts for your business. Do as much research as you can to try to see if your assumptions are correct.

Balance Sheets: Balance sheets have a lot of information on them, but the most important thing to know is that they list your assets and your debts. For example, if you spend $100,000 on building out your child care center, you won’t make money right away. Instead, it’s an asset that will hopefully help you make money for years to come. Similarly, if a bank gives you a check for $100,000, you don’t have to pay it back right away. Rather, that is a debt that you will pay back over time.

Cash Flow Statement: Your cash flow statement will show you how much money you need to start or grow your business and make sure you never run out of money. Most entrepreneurs and business owners don’t realize that you can make money but still run out of money and go out of business. For example, let’s say a company came to you with a big child care contract worth $100,000 that would cost you $50,000 to finish. Well, most of the time, you’d need to pay that $50,000 now for things like employee salaries, etc. But let’s say the company took 180 days to pay you. During that period of 180 days, you could run out of money.

When you make your Income Statement and Balance Sheet, make sure to include some of the most important costs of starting or growing a child care center:

  • Setting up a daycare center, including fees for design, building, etc.
  • Cost of tables, chairs, couches, and other types of furniture.
  • Costs of things like computers and TVs that are used
  • Payroll or staff salaries Business insurance
  • Fees and licenses
  • Legal expenses