How to Create a Daycare Business Plan

How to Create a Daycare Business Plan When Starting a Daycare Business

A daycare business offers the perfect opportunity for an entrepreneur. That’s especially true if you love caring for children. There are franchise opportunities available for child care businesses. Or you could start your own from the ground up. You can focus on a specific niche or age group. Or accommodate a wide array of families. But before taking any of those routes, you need a daycare business plan.

This type of plan can help you figure out where you fit in the marketplace and help you get the funding you need to get started on the right foot. If you’re thinking about starting a daycare business, then here’s helpful tips on how to create a daycare business plan that will make your dream a reality.

What Needs to Be in a Daycare Business Plan?

General Overview

With any business plan, the first section should explain basically what the business does. It’s not enough to just say you want to start a daycare business. You should also include your mission statement, brand positioning and anything that would set your child care center apart from others. For example, if you plan to focus on teaching STEM topics to kids, that could be a major differentiating factor.

Target Customers

Many daycare centers have a niche that would require them to narrow down their target audience beyond that of young families in general. Your differentiating factors can often help you determine who your target audience may be. For instance, if you offer a completely personalized experience for those with learning challenges, you could target families with children who have special needs. If you offer flexible scheduling, you might target parents who are busy working professionals. You could also narrow down your target based on age groups or geographic area.

Market Analysis

Once you have an idea who you’re targeting, it’s important to look at what other companies serve those customers and what the general market looks like in your area. This section should examine your competition and the major players in your industry. And it should also examine the size of your potential customer base. This should help you really nail down where you fit into the picture and make sure that there are enough families in your community who are looking for what you have to offer.


There are a few different ways you can organize the management of your child care business. As Molly Hansen of BayState Business Brokers explained in a phone interview with Small Business Trends, some daycare centers are owner/director, where the owner is the same person who runs the day-to-day operations. Others are owner/non-director, where the owner hires a separate director to handle those daily operations.

If you want to have control over more aspects of your business and are a certified child care professional, you might go the owner/director route. However, if you want to scale your business quickly or potentially even sell it to another operator one day, an owner/non-director model may make more sense. From there, you might also consider having an assistant director or two, and organize the rest of your team from there.

Marketing Objectives

How are you going to reach your target customers with the messaging you laid out in your mission statement? Will you take out ads in local publications, focus on online search marketing or sponsor local events? With a daycare business, you may also benefit from focusing on referrals. You can connect with other companies that serve young families in the area or offer incentives to customers who tell others about your business.

Legal Structure

This section is essential for business plans in any industry. This should explain the legal structure of your business, whether its a corporation, LLC or partnership. You also need to work with your state’s Department of Education to make sure you have all the proper licenses to operate a child care center. And lay out all of those details in your business plan so any potential investors or partners know that you have your bases covered.

Financial Details

Find your location. Get your team and other details nailed down. Then you should have a pretty good idea about the operating expenses of your center. This section is where you lay out those expenses. The money you expect to bring in is based on projected enrollment. Do you plan to seek funding from outside sources? This is also where you should include exactly what you’re looking for. And what that funding will go toward.


Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends and has been a member of the team for 12 years. Annie covers feature stories, community news and in-depth, expert-based guides. She has a bachelor’s degree from Columbia College Chicago in Journalism and Marketing Communications.