child care business
Starting your own daycare center can be both exciting and daunting. Many of those who choose to pursue this step in their career do so out of passion for helping children develop and reach their full potential.
While passion and child care experience are musts when opening a daycare, it cannot be overlooked that child care and daycare centers need a solid business plan. Therefore, the opening of your daycare center must be approached with a careful strategy in place to ensure success in the early make or break years. This combination of a clear mission and a carefully constructed business plan will greatly increase the success of your child care business.
At Procare, we want to encourage and enable child care professionals with all of the tools they need to enrich the lives of their students. That is why we have created this outline of important business needs to consider when starting a daycare center. The following information will provide aspiring daycare owners with direction throughout this challenging process.
The “Why” Behind Opening Your Daycare Center
Starting a business, especially one as demanding as child care, is a huge time and financial commitment. It’s a good idea to examine the reasons driving your decision to open a daycare center, or “your big why.” Make sure you have a clear understanding of the time you will be required to devote before and after opening.
You should also consider your previous child care experience. If you have been in this field for years and know it is what you want, then you can move on to the business planning stage. However, if you have relatively little experience in the field, it might be prudent to gain more experience at an independently owned center or even franchise. Think about why you want to open a daycare and the specific attributes that make you uniquely qualified for this filed.
Assessing Your Market
Once you are committed to opening your own daycare center, you will have to do research to determine how competitive a marketplace your community currently is, and how sustainable an environment it will be for your business in the future.
First, are there already daycare centers open in your community? If so, you will want to look at things like:
- What kind of center are they?
- What age groups do they accept?
- Where are they located?
Another good indicator of the need in your community is whether these child care centers have waiting lists. This information can help you determine if there is enough demand in your community to open you center there.
Another research strategy is to look at the current demographics in your neighborhood. If there are a lot of young families or newlyweds, this indicates that there will continue to be a need for your services in the future.
Differentiating Your Daycare Center
Once you are familiar with the current child care landscape in your community, you have to think about how you will differentiate your program to fill a need not currently being addressed.
Look at the hours of operations for the other centers in your community. Perhaps there is a timeframe early in the morning or late in the evening during which these centers are not open. Filling this need could make your center a valuable resource for parents.
Additionally, if there is an age group that is not being served, such as daycare for infants (newborns to a year) or after school programs, your center could establish a foothold by filling these needs.
Bonus Tip: Talk to parents in your community to find out what they need most from a daycare, and aim to address these needs at your center.
Once you have done this initial research into whether your daycare business will be viable in your community, you have to begin compiling a comprehensive business plan that maps out your objectives and the strategies by which you will bring them about.
Child Care Center Business Plan Checklist
Here’s a checklist recapping some essential steps of putting together your child care business plan:
- Competitor matrix
- Financial Planning: Funding and budgeting
- Location of your business
- Staffing needs
- Licensing requirements
- Materials, equipment, and program agenda
Bonus Tip: As you go through creating your business plan, it is a good idea to mark down important deadlines and milestones on a calendar. This will ensure you have an accurate timeline for how long planning and preparations will take, and a strong estimate for when your business will be able to open.
There are many legal regulations to consider when opening your center. License requirements are typically determined by states, and therefore will vary based upon where you live. You will have to make sure your business is in compliance with these regulations by acquiring the proper licenses. Child Care Aware offers a licensing resource that directs you to the proper licensing authorities by state.
It is important to note that child care licenses and business licenses are not the same. You will likely have to acquire separate business licenses and child care licenses to legally operate your business.
Starting a business is financially demanding. For your endeavor to be successful, it is essential that you accurately assess how much it will cost for you to open the center, determine where that money will come from, and then budget and plan to ensure your financial structure will sustain your business as it gets off the ground.
During this process, you should consider initial expenses, and how much it will cost to run your business on an annual and monthly basis. Consider how much you will pay your daycare staff, what your tuition structure will be for parents, how late fees will factor in, and how much property rent / cost is in your community.
Potential Costs of Opening a Daycare Center
A few examples of the costs associated with opening a daycare center are:
- Property renovations
It is important that you don’t begin the business process until you know how it will be paid for. This is money can be accrued from a variety of sources including your personal savings, loans from friends, loans from the bank, government programs, or grants.
It is important that you keep track of your expenses and cash flow for multiple reasons. First, it will help you to track and pay back any loans in accordance with the agreement you made with the lending party.
Second, tracking cash flow ensures that you don’t overspend, or create a payment structure that will jeopardize the financial stability of your business on a month-to-month basis.
To be aware of when money comes into and leaves your center monthly, you should be tracking: the number of tuition payments you get per month, how many times a month your center pays employees, how many enrolled children you are permitted to have, and how many of those slots will be filled.
Bonus Tip: Doing these calculations by hand leaves room for error, so we recommend a child care accounting solution that will track financial information for the center and the families you serve, as well as tracking bookkeeping, tuition payments, and cash flow.
Choosing a Location
The first thing to determine when choosing a location for your daycare center is if you want to run the center from your own home, or in a commercial space. This will affect your expenses and licensing requirements.
The location of your daycare center will be subject to many licensing regulations, including building safety, zoning, physical space requirements, emergency preparedness, and more. Many of these are to ensure that the environment in which you run you center is healthy and secure. This includes things like proper waste removal and having fire alarms.
Two important location licensing requirements to keep in mind are zoning and physical space requirements. Zoning refers to a permit from the proper authority that allows you to run a business, or be zoned for business. The physical space regulation refers to the requirement that child care centers must have 25 square feet available per student. Therefore, you have to keep in mind that the size of your space will determine how many students are allowed to enroll.
For parents to feel comfortable leaving their children at your center and confident that they will get the developmental stimulation they need, you staff has to be well trained and experienced. Additionally, you must have enough instructors to provide quality group and individual care, as well as meet ratio requirements.
When hiring staff for your center there are three key features to keep in mind:
- The student-to-teacher ratio
- Licensing requirements
The student-to-teacher ratio refers to the number of instructors that must be present based on the number of and age of the students. The National Association for the Education of Young Children provides recommended ratios based on age and group sizes.
Staff Licensing Requirements
Professional certification requirements and licenses vary by state; however, child care providers are often expected to have a high school degree or secondary degree. Common certification requirements are the Child Care Professional certification and the Child Development Associate certification. These require a certain number of hours of experience in different child care fields.
You should also make sure that your staff has training in safety courses such as CPR and first aid, as well as how to asses and document child development to report to parents. Child care instructors can provide important information to parents about where their children are developmentally, and where they may need individualized attention. That is why it is important to have reporting and parent engagement processes defined at your center, to simplify communication between caretakers and parents.
Bonus Tip: The interview and review process to find the perfect candidates for your center can be time consuming, so you will want to start the hiring process at least two months prior to the opening of your center.
With financing, licensing, location, and staffing researched and prepared, you are almost ready to open your child care center. Final steps will be getting the necessary equipment and supplies, and setting an agenda for your daycare programs. You will need kid sized tables, furniture, and cots, as well as toys, crafts, and games. You will also need cleaning and administrative supplies.
When setting the agenda for your program you will want to establish routine daycare schedules for each age group. These schedules should incorporate activities that promote early child care development in major areas such as cognitive, emotional, and physical development.
As you get to know your students better, you will be able to cater the activities and learning programs to their specific interests.
The processes and planning that go into starting a daycare center can be overwhelming. However, with a defined mission and strategic business plan in place, it can be a successful and worthwhile endeavor. Following the guidelines above will give you the structure you need to build a thriving daycare center with an environment that fosters healthy, happy kids.
Looking for ways to automate and organize administrative and business functions at your daycare center? Learn how Procare can help!
Want more tips and resources to help start your daycare center? Check out these related articles:
How much time will you save in your child care center?
Procare Software® helps child care professionals across the country save 40+ hours per month of administrative duties they were doing manually. With quicker access to information, point-and-click reporting and built-in processing, Procare helps you easily manage your center and analyze important staff and child information in seconds—giving you the time to develop your business and focus on the children.
- Succinct tracking of enrollment and schedules
- Immunization updates
- Quickly post child tuition fees
- Automatically collect tuition payments
- Print/email statements and balance notifications
- Communicate with parents and employees via messages at check-in, email or text blasts
- Maintain logs for incident reports and milestones
- Deposit reports and end-of-year tax statements
- Roll call and sign in/out sheets, birthday reports, waiting lists, classroom ratios
- Automated check-in for parents and employees
- Accurate time card records and calculations
- Let parents pay at check-in or online
- And so much more!
The new school year is coming!
With the new school year coming up soon, now is the best opportunity to get going with your new system.. Financing is available to work easily within your budget. Please contact Procare at 800-338-3884 or visit us online.
Being a child care director is both a challenging and exceptionally rewarding job. The nuances of combining physical care and education in a nurturing environment requires a special person, because there is so much to do.
More than providing high quality care for each child, building curriculum and working together with parents to ensure development, you are also running a business. This means taking care of time consuming administrative tasks to ensure the continued success of your center, such as collecting tuition, calculating payroll, managing supplies, and more.
Of course, there are also state licensing requirements that must be addressed to ensure your child care business complies with legal standards. These include attendance and meal tracking, monitoring employee training and certifications, and assuring that proper teacher-student ratios are met.
Child Care Management Checklist
Here we have created a mini-checklist to guide you through the many management tasks in your center, as well as solutions to help streamline the process.
While receiving just one payment might seem like a small thing, accepting the check, writing a receipt and recording it in a ledger or spreadsheet can be a 5 minute task. Easy, right? If you have 60 families and you’re handing payments this way twice a month, you could be spending up to 10 hours on managing payments alone. That is once you have tracked each payment down. Parents are busy and can often forget when their next payment is due, leaving child care providers to track them down at check-in time or the end of the day.
Procare’s Tuition Express® gives you easy options to process all payments at once or let parents pay at check-in and online. Since it’s fully integrated with Procare, each payment is automatically posted to the the family’s ledger.
Maintain Room Ratios
Juggling teachers, aides and children between rooms is an all-day, everyday chore. If one teacher goes on a break, you could go over your limit. In addition to licensing requirements for each age group that dictate a certain number of staff members must be present per child, ratios can also affect your finances. Having too many teachers staffed on a day when there are fewer students means you are spending money unnecessarily. That is why an accurate view of how many children are in your care on a daily basis is necessary.
Procare’s dashboard offers you at-a-glance classroom counts and shows any that may be understaffed.
You know the drill—climbing a mountain of paperwork each month to compile your meal reports. If you’re participating in the CACFP and you’re not using Procare’s Meal Tracker to handle meal counts and help with reporting, you’re working too hard.
Laugh at Your Bottom Line
Weekly and monthly financial tracking by itself, is a full-time job. If you don’t have a bookkeeper on staff, you know that tracking, reporting, and reconciling takes time. Procare’s Expenses and Ledger module handles these tasks and more… tracking expenses, generating overall financial reports, and helping you manage your budget all year long.
Child care management is a dynamic job that requires interpersonal skills as well as business acumen. With this checklist, child care professionals can ensure they are maintaining their business, while saving time.
Learn how Procare helps child care providers complete administrative tasks everyday.
Interested in learning more about saving time at your child care business? Check out these related articles:
Hugging a teddy bear can help kids feel braver when it comes to getting a shot. And while they may have to endure a brief moment of pain in the name of good health, at least they don’t have to deal with the hassle of keeping track of immunization records and paperwork. Truth be told, neither should you.
As a child care professional, chances are you’re familiar with the recommended immunizations for young children and you’re careful to make sure every family brings in the child care immunization records for their children before they can attend. Next on your list is the question of how to efficiently keep track of all the immunization requirements, due dates and child history.
How to Track Child Care Immunizations
To help you simplify the paperwork, here are some essential features to look for in immunization tracking software to keep your immunization records up-to-date.
Flexible Immunization Schedule
In order to track when the next immunization is due, you’ll need a way to define the schedule of required vaccinations. Since each shot requires a different schedule, you’ll want the child care database you choose to be flexible. For example, one immunization may have multiple doses due at specific ages, another may be due every 12 months, and a third may be due so many months after the last one, rather than at a specific age—such as when children are on a make-up schedule.
Allow for Exemptions
Children may be exempt from certain vaccinations for a variety of reasons.
- If they’ve already had an illness, like chickenpox, the immunization (such as varicella) may no longer be necessary.
- A child might have an exemption due to family philosophical or religious reasons.
- Combo-vaccinations are another reason for exemptions. Families might choose (or their pediatrician might recommend) individual shots or a vaccine that combines multiple immunizations into one. Therefore, you’d need a way to exempt children from the “individual” shots or vice-versa.
- An age exemption is another possibility. For school-age children you may not be required to track immunizations that apply to younger children.
One final thought on exemptions: you’ll also want a way to indicate the reason why a child is exempt.
Alerts When Immunizations are Due
It’s good to know when an immunization or other requirement (physical, etc.) is due, but it’s even better to get advanced notice of when it’s coming due. In other words, you’d like the parents to know ahead of time, so they’re able to make sure they have the necessary doctor’s appointments arranged.
You may also want a way to:
- Easily see on your director’s screen when immunizations are due or coming due.
- Let parents see immunizations that will be needed soon, at the time they check their children in.
- Generate reports and lists showing immunization information.
Beyond knowing what’s coming due, you’ll also want an efficient way to track the history for each child. In other words, what dates did a child receive each vaccination in the sequence? Typically, this information should be available on an immunization history report.
Making sure the kids attending your child care center are up to date with their immunizations is necessary to ensure the health of every child in your care. However, when the year gets underway and your schedule fills up, it can be easy to lose track of the multitudes of paperwork that go along with immunizations records. To mitigate these challenges and manage health records, child care centers should employ immunization tracking software with a degree of flexibility and customization that allows them to account for each child’s needs.
Learn how Procare can help you better keep track of family health information at your child care center.
Interested in learning more about managing health information at your child care center? Check out these related articles.
- Immunization Tracking – Looking Forward
- Tracking Child Allergies – Part One
- Move Daycare Records to Your Smartphone, iPad, etc.
Are you a collector? I’ll bet you are and you don’t even know it. When I was young, maybe 10 or 12 years old, I had a stamp collection and looked forward to going to the small post office in my hometown to see what newly issued stamps were available. There were only a few postal workers in our branch and they all got to know me after a while. They’d wait patiently as I made my choice about what plate block to buy that week, using money from my allowance or part-time job.
Collector’s note: A plate block is a group of stamps, along the corner edge of a larger sheet, which contains the plate number (kind of like a serial number) from which the stamps were printed. It’s the little white edge most people tear off, but when attached to the stamps, it’s considered rarer and more valuable than just a random block of stamps. Okay, that’s more than you really wanted to know about philatelists (stamp collectors).
Your Personal Collection
Perhaps you collect something too? Maybe you have a theme collection, such as items with butterflies, turtles or kittens on them. I had an aunt who collected anything with strawberries, including wall hangings, knickknacks, teapots – you name it. Some people collect thimbles, key chains, teacups, comic books or baseball cards. But even if you don’t have an official collection of any particular kind, there’s something you, as a child care business owner, do collect. Continue reading