If you are planning to start a childcare center you are on to a good thing. This is one area where there is no recession. At the same time you are up against competition. Profit may not be your motive but, in order to survive and prosper, any venture needs to make money. In fact, any business needs to earn well if it needs to grow. Do you have a business plan? If not, prepare one. There are good reasons apart from the fact that it will help you obtain financing. Your business plan could be on these lines.



This is the first thing to do. Know your market. This means you must do some research to know the potential your area holds within a radius of about 10 miles. People from far away are not likely to make use of your facility. Your market analysis should cover the number of families in your area and how likely they are to use your service. The market survey also takes in existing child care centers in your area and their USPs. Get to know how much they charge and why. Is there a potential for growth in your area or is it saturated? 



Business must go into details about costs in each aspect. Your child care center costs should cover the following:

  • Infrastructure cost: This includes the money you will spend on your premises, renovating it, buying equipments, paying labor for sundry tasks and all other related costs.
  • Startup advertising: Even if you do not plan to use them, make a marketing business plan for childcare center in which you factor in all avenues of advertising and marketing and how much it will cost you. This is going to be a major expenditure unless you find cost-saving methods, word-of-mouth, email and social media avenues to advertise. Will newspaper ads work? How much does each insertion cost and how many will it take? If you are going to use media then you also need to factor in costs it will take to create such media using graphic artists.
  • Salaries to staff: How many people do you plan to employ? You will need to pay salaries. Make a list of monthly salary expenses for child care center and see how much it adds up to over a year. Can you last a year? It takes quite some time for child care centers to gain traction.
  • Food, medical supplies, toys, and maintenance: Make a list of all such items and how much they will cost.


  • Breakeven: How many children do you need at a minimum to meet breakeven point? Consider the normal charges other centers levy and add them up for, say, 5 children, 10, 15 and 25. That gives you a fair idea of minimum number of children you will need to make your plan profitable. As you will see when you make business plan for child care, you are not going to make any profit for at least a year or two unless you have a whole bunch of kids. Can you last a year, two years? At the very least your center should earn to pay for salaries and costs.



If you are simply going to take care of 2 or 3 children as a way to pass time, you need not form a legal entity. However, if you are going to make it a business then it is worthwhile forming a legal entity. Consider the associated costs as well as costs of licensing. While at it, make an organizational chart. Employees need to know their responsibilities.



Make a timeline of implementation with costs at each stage. It gives you a precise idea of how much you will be spending. A cash flow statement for child care center is necessary so you have a clear idea of outgoing and incoming funds.

Put it on paper. It gives you greater clarity.

Good Luck!


Published by Jack Louis