Daycare Business Plans: The Top 10 Reasons You Need One

Why do you need a business plan?  First and foremost, a business plan is a basic requirement to getting government grant and loans, as well as bank loans.  It is also a great way to focus the complete picture of your daycare, get it out of your head and down on paper.

There is something about writing a plan down on paper that brings it into reality, and requires greater precision.  This is what a business plan will do for you and your child care business.  It does not matter if you’ve been open for years or just starting out - you will gain tremendous value from writing it down.

Preparing a business plan can be a long and daunting task, but I recommend using a daycare business plan template to give you a head-start and save you hours of time.  If you’re not already convinced, here are 10 big reasons why should have a business plan:

1. Sets specific objectives for your daycare.  Good owners set specific objective that can be measured.  This allows you to keep track of how you are doing and make changes if needed.
2. Helps define your strengths.  A major part of any plan is learning what your strengths are in a business both personal, professional and as a business.  Knowing your strengths will allow you to play to them.
3. Helps uncover your weaknesses.  Just like with your strengths, knowing your weaknesses can be a massive advantage for you.  If you know where you are weak, you can focus more energy on this area, or find somebody else who can help you.  Or best of all, delegate this area to someone else completely!  An example is my friend Christine who runs her own daycare, and she is weak at keeping track of her business paperwork and finances.  Luckily, her husband Robert is an accountant.  He handles ALL the paperwork, receipt tracking, payments, and accounting for her.  Sounds like a perfect marriage!
4. Helps you know and understand your competition.  In developing your plan, you will get to know your competition, what their unique benefits are, and what their weaknesses are.  From this you should be able to determine where you can compete with the greatest success.
5. Enables you to deal with professionals.  Having a business plan will allow you to deal with other professionals, such as lawyers, accountants, insurance agents, and consultants, in a confident manner.
6. Understand who your customers are and what they want.  To be successful in child care you need to give the customer what they want, not always what they need or what you are best at.  The business plan process will help you to find out more about your customers.
7. Determine how much money you will make.  Knowing your customers, your competition and your strengths, you will be much better able to make an accurate projection about how much money you will make, how much you may need to pay out in expenses and how much you get to keep!
8. Understand how much it will cost to start your daycare.  If you haven’t yet started your daycare you will learn how much money you will need to get started.  Depending on the size of your center this may be almost nothing to 6 figures for a new child care center.  Knowing the costs will help you figure out where you can save some money too.
9. Help you sell your daycare.  Right now you may not be thinking about selling the business you are just starting but down the road you may decide to.  It is always good to get paid a large amount for all the hard work you put into your daycare.   A good business plan that has made you successful goes a long way in receiving a good sales price.
10. You simply must have one to apply for grants and loans.  To get any money from the government or banks you need to have a business plan.  Not having a plan is one of the biggest reasons people don’t apply for government grants and loans and why that money goes unused.   The money is out there for the asking, but you must have a business plan to get any of it.

Yes, preparing a business plan can be a daunting process.  And if you take it on from the beginning alone it will be.  But luckily you have several great options.  There are several business software programs on the market you can use.  These are good and they walk you through the process with examples for each section.

Another option is to have a business plan created for you by a professional.  This is the easiest but also the most expensive route.  Search the web and you should find several companies willing to do all the work for you and send you a professional plan.
A third option is a “done for you” daycare business plan template.  I’ve have a couple of these for you, (daycare center business plan, home daycare business plan), with just about everything already done.  I’ve helped enough daycares to know what 90% of the business plan should be.  I find from coast to coast the same information in just about every business plan.

It’s up to you how you go about writing your business plan, but you should strongly consider getting started today writing one.  Success is just so much easier with a good business plan for your daycare.

Share on Facebook