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January 10, 2022

How to Create a Daycare Business Plan

Creating a daycare business plan and sticking to your budget will ensure the success of your business. All that really means is that you need a system to track your income and expenses that you’ll actually follow, while making sure you don’t spend more than you bring in.

The biggest challenge in setting your budget is determining what your necessary expenses are and identifying areas where you should not be spending your money. From payroll to cleaning supplies, you’ll need to closely consider what items are essential to your operation and what items you do not need.

Two basic things to consider:

  • What are Your Necessary Expenses
  • Needed Enrollment Numbers and Program Pricing To Break Even

Budgeting isn’t as scary as it may seem. Paying close attention, and deploying some discipline will be key to successfully structuring your budget.

You Need Income

When it comes to your daycare business plan, enrollment numbers are where your source of income comes from. The more students you have, the more money you bring in – so long as you have the appropriate resources to manage those numbers. To find out how many students you need to enroll to bring in enough money for your business to succeed, you need to first look at your expenses required to deliver care for those students.

Enrollment Revenue

This number needs to factor in how many children you are capable of enrolling at a given time based on based on your available resources. You should also consider what your competitors are charging, what unique services you are providing, and licencing requirements of your particular state or province.

Things to consider when calculating your rates:

  • The capacity of your center’s location based on floor area and licencing.
  • Your operating budget.
  • What competitors are charging.

Working backwards from your total expenses can help to determine your pricing structure. After adding up all of your expenses, calculate how many children you will need to enroll to determine how much income you will generate. Then, you can discover how much you will need to charge per child.

Administrative Fees

Running a childcare center requires a lot more than just supervision. The value you are providing comes from all that it takes to run your operation. Some of the pieces of the puzzle needed to inform your daycare business plan include software systems for:

  • Payroll
  • Accounting
  • Expense Tracking
  • Billing / Payment Processing
  • Forecasting and Reporting


Determining staff wages can be very tough for center owners. You will want to ensure you look at other child care jobs in your area to help determine your salaries. These, like your enrollment fees, will need to be derivative of the money you expect to bring in.

When planning for staff, first check with your local government as there may be specific requirements for teacher/child ratios.

Some common roles to budget for include:

  • Director
  • Assistant Director
  • Head of Curriculum
  • Teachers
  • Substitute Teachers
  • Administrators / Accounting
  • Cleaners
  • Maintenance
  • Cooks

Depending on the size of your center, some of these positions may be possible to combine into one person.


Don’t forget to factor in the utilities of your childcare center’s physical structure in your daycare business plan! These will fall into your expenses bucket and will help to determine your total operational costs. Be sure to plan for everything you know so that you are prepared to address all that you don’t.

Budget Planner Template

Christina Vaan

Christina is a blog writer and early childhood education content specialist at Kindertales.

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