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Executive Summary

The executive summary is the first part of your daycare business plan, but you usually write it last because it is a summary of the most important parts of your plan.

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

Next, give a quick summary of each part of your plan. For example, in a few words, describe the daycare industry. Talk about the type of daycare center you are running. Include detailed information about your nearest 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 company analysis, you will talk about the kind of daycare you run and describe your business.

For instance, you have to decide what kind of day care you want to run:

  1. Home-Based Daycare: This type of daycare usually runs out of one or two people’s homes.
  1. Daycare center: This type of child care center runs out of a business building. Most of the time, it has a lot of teachers and staff, so it can take care of a lot of kids.
  1. Preschool daycare is a daycare center where most of the children are between the ages of 3 and 5.
  1. A daycare for kids who spend most of their time at school.

In the “Company Analysis” section, you need to describe what kind of day care you run and give some background on the business.

Include answers to questions such as:

  • When did you start your daycare business, and why?
  • 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 need to give an overview of the child care industry.

This might seem useless, but there are more than one way to use it.

First of all, learning about the business of daycare gives you knowledge. It helps you understand the market better.

Second, market research can help you come up with a better plan, especially if it shows you market trends. For example, if there is a trend toward daycares that offer transportation, it would be helpful to make sure that your plan includes this service.

Doing market research is also a good way to show your readers that you know what you are talking about. This is what you do by doing your research and putting it in your plan.

For the market analysis part of your daycare business plan, you should answer the following questions:

  • How much money does the business of daycare bring in?
  • Is the market getting smaller or bigger?
  • Who are your main competitors in the local or national markets?
  • What new things are happening in the daycare business?
  • How do you think the business will grow over the next 5–10 years?
  • How large should the market be? That is, how big do you think the market could be for your daycare? Find out how big the market is in the whole country and then use that number to figure out how many people live in your area.

Customer Analysis

In the section about customer analysis, you should talk about the people you serve or plan 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 target audience is based on demographics and how they think and feel. You should talk about the ages, genders, locations, and income levels of the families you want to help. Because most daycares serve people in the same area, this kind of demographic information is easy to find on government websites.

Psychographic profiles can tell you what your target families want and need. The better you understand and define these needs, the easier it will be to get families to move there and keep them there.

Competitive Analysis

Your analysis of the competition should tell you who your direct competitors are, so you can focus on them.

You have direct competition from other daycare centers in your area.

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

When it comes to direct competitors, you should list the other daycares or child care centers you compete with. Most likely, the daycares that are close to you will be your main competitors.

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

  • What types of parents do they help?
  • What daycare services do they offer?
  • 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 point of view of the parents.

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

  • Will you provide superior daycare services?
  • Will you provide daycare services that your competitors don’t?
  • 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. You should include the following in a business plan for a child care center:

Product: In the product section, you should again describe the type of daycare you talked about in your Company Analysis. Then, describe 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 the parts of your marketing plan about products and prices, you mostly talk about the child care services you offer and how much they cost.

Place: where your daycare is. Write down where you are and how it will affect your success. For instance, is your daycare next to a busy office building, gym, or other place with a lot of people? Talk about how a steady flow of customers could come to your location.

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

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

Operations Plan

In the first part of your daycare business plan, you talked about your goals. In the operations plan, you talk about how you’ll reach those goals. Your operations plan should have two different parts.

Short-term daily procedures include everything you do to run your daycare, like talking to potential new customers, getting supplies, keeping the 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 prove that your daycare can be successful, you need a strong management team. Show off the skills and experiences of your key players and teachers that prove they can help your child care business grow.

You and/or your team members should have worked in the daycare or child care business before. If so, talk about your skills and experience. But you should also list any experience or certifications that you think will help your daycare business succeed.

If your team is missing something, you may want to form an advisory board. Your daycare business would benefit from the advice of a two-to-eight-person advisory board. They would help answer questions and give suggestions about how to plan. If you need to, look for advisory board members who have worked in daycare centers or who have run a small business or retail store successfully.

Financial Plan

Your 5-year financial plan should start with a monthly or quarterly breakdown for the first year, then switch to an annual breakdown for the next four years. Your financial statements include your income statement, your balance sheet, and your cash flow statement.

A more common name for an income statement is a P&L, which stands for “Profit and Loss.” It shows how much money you made and then subtracts how much you spent to show if you made a profit.

Income statement: You need to make some assumptions. For example, are you going to feed 10 kids a day or 50? And will sales grow each year by 2% or 10%? As you might expect, your assumptions will have a big impact on the financial forecasts for your company. Try to find out as much as you can about your assumptions to see if they are true.

Balance Sheets: These financial statements have a lot of information, but the most important thing to know is what your assets and liabilities are. For example, if you spend $100,000 to build out your daycare center, you won’t make money right away. Instead, it is an asset you can use to make money for years to come. Also, a $100,000 check from a bank doesn’t have to be paid back right away. You will have to pay that back slowly instead.

Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure that you never run out of cash. Most business owners and entrepreneurs don’t know that you can make money and still go bankrupt if you run out of money. For example, let’s say a company offered you a big daycare contract worth $100,000 that would cost you $50,000 to complete. Well, in most cases, you’d have to pay out that $50,000 now for things like employee salaries, etc. But let’s say that it took 180 days for the company to pay you. You could run out of money during that time.

When making your financial projections, be sure to include some of the most important costs of starting or growing a daycare center, such as:

  • Setting up a daycare center, including costs for design, building, and other things.
  • How much things like tables, chairs, couches, and other furniture cost.
  • Costs of used things like computers and TVs
  • Payroll or salaries given to workers Insurance for businesses
  • Charges and permits
  • Legal expenses